^fOI 


REPORT  OF  THE 
STREET  RAILWAY 
COMMISSION  ::  ::: 


TO  THE  CITY  COUNCIL  OF 
THE    CITY    OP   CHICAGO 


DECEMBER..     .1900 


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Report  of  the 

Street  Railway  Commission 


TO    THE 


City  Council  of  the  City  of  Chicago 


Aid.  MILTON  J.  FOREMAN,  Chairman 

Aid.  WILLIAM    S.  JACKSON  Aid.  ERNST  F.  HERRMANN 

Aid.  WILLIAM    F.  BRENNAN  Aid.  JULIUS   GOLDZ1ER 

Aid.  WALTER  J.  RAYMER  Aid.  WILLIAM    MAYOR 

GEORGE  C.  SIKES,  Secretary 


December,    1900 


CONTENTS. 


Resolution  creating  the  Street   Railway  Commission  and 
supplementary  resolutions  and  acts  of  the  City  Council 

relating  to  the  Commission 5 

Letter  of  Transmittal 9 

Text  of    Report,  under  the  heading,   Questions   of  Street 

Railway  Policy  Discussed 1 1 

Introductory 1 1 

Summary  of  Recommendations  of  the  Commission.  .  14 
Discussion  of  the  Recommendations. 

I.     Unification  of  Management 17 

II.      Public  Control  and  Duration  of  Grants  19 

III.  Municipal  Ownership 29 

IV.  Referendum 36 

V.     Publicity 37 

VI.     Control  of  Capitalization 38 

VII.      Frontage  Law 41 

VIII.      Labor  Policy 43 

IX.      Motive  Power 45 

X.      Subways 49 

XL      Rate  of  Fare  and  Compensation 50 

XII.      Coordination  of  Service 52 

XIII.     Legal  Questions — the  99- Year  Act.  .  .  53 

Text  of  Street  Railway  Bill 55 


PAGE. 

Appendix 71 

I.  Letter  of  Mr.  Milo  Ray  Maltbie,  Editor  of 
Municipal  Affairs,  to  the  Street  Railway 
Commission  73 

II.      Public    Policy   Concerning    Rapid    Transit. 

Address  by  Mr.  George  E.  Hooker 77 

III.     Two  Views  of  Municipal  Ownership. 

Advantages     of     Municipal     Ownership. 
Dr.  Albert  Shaw,  Editor  Review  of  Re- 
views       89 

Municipal  Ownership;  A  Question  of  Ex- 
pediency and  Local  Conditions.  Prof.  J. 
Laurence  Laughlin  of  the  University  of 
Chicago 94 

IV.  The  right  to  own  and  operate  Street  Rail- 
ways may  be  of  great  value  to  cities,  even 
though  such  right  be  not  actually  exer- 
cised, as  a  means  of  enabling  cities  to 
deal  more  advantageously  with  private 

corporations 99 

Letting  Contracts  Without  Competition. 

Editorial  in  Engineering  News 99 

Franchise  Philosophy.      Editorial    in  Chi- 
cago Tribune 103 

V.  Extracts  from  the  Report  of  the  Special 
Committee  appointed  by  authority  of  an 
act  of  the  Massachusetts  Legislature  to  in- 
vestigate the  relations  between  cities  and 
towns  and  street  railway  companies 105 

VI.  Franchise  Policy  of  Congress,  as  exempli- 
fied by  the  legislation  with  reference  to 
franchise  grants  in  Porto  Rico 1 23 

VII.  The  Paris  Subway  System.  Address  deliv- 
ered before  the  Street  Railway  Commis- 
mission  by  Prof.  Edmund  J.  James  of  the 
University  of  Chicago 124 


RESOLUTION  CREATING  THE  STREET  RAILWAY 
COMMISSION,  AND  SUPPLEMENTARY  RESOLU- 
TIONS AND  ACTS  OF  THE  CITY  COUNCIL 
RELATING  TO  THE  COMMISSION. 


The  City  Council,  at  its  meeting  of  December  18,  1899, 
adopted  the  following  resolution,  offered  by  Alderman  Foreman : 

WHEREAS,  The  contractual  relations  at  present  existing  between  sev- 
eral of  the  companies  operating  the  street  car  systems  in  the  City  of 
Chicago  and  the  municipality  of  the  City  of  Chicago  will  shortly  expire ; 
and 

WHEREAS,  The  problem  of  the  renewal  or  extension  of  these  franchises, 
and  of  all  others  that  are  to  expire  in  the  future,  presents  itself  at  the 
present  time,  and  in  view  of  the  magnitude  and  variety  of  interest  in- 
volved is  of  paramount  importance ;  and 

WHEREAS,  It  is  the  almost  unanimous  opinion  of  the  people  of  the  City 
of  Chicago  that  the  existing  laws  and  ordinances  concerning  street  railway 
franchises  and  the  municipal  regulations  of  the  operation  of  street  rail- 
way systems  are  antiquated  and  were  enacted  at  a  time  when  the  City  of 
Chicago  had  not  reached  its  present  stage  of  development,  and  such  acts 
and  ordinances  are  wholly  inadequate  to  meet  the  needs  and  requirements 
of  the  City  of  Chicago,  both  with  respect  to  accommodations  and  facilities 
for  passengers  and  for  compensation  for  the  use  of  the  public  streets  and 
highways  by  said  operating  companies,  and  in  many  other  regards ;  and 

WHEREAS,  In  view  of  these  existing  conditions,  constructive  legislation 
is  necessary,  looking  toward  the  enactment  of  such  contracts  as  will  result 
in  a  correction  of  the  evils  and  defects  of  the  past  and  assure  to  the  people 
of  the  City  of  Chicago  good  and  efficient  service,  as  well  as  just  and 
adequate  remuneration  for  the  privileges  enjoyed  by  the  companies  to 
whom  such  franchises  or  renewals  thereof  may  be  granted ;  and 

WHEREAS,  The  question  of  municipal  ownership  of  street  railways  is 
engrossing  public  attention  and  finds  many  advocates  amongst  citizens 
having  the  interest  of  the  city  at  heart,  and  the  expediency  and  desirability 
of  this  step  is  one  of  the  questions  that  must  be  taken  into  serious  consid- 


6  REPORT    OF    THE 

eration    before    any    final    steps    are    taken    toward    renewing    existing    or 
granting    new    franchises ;    and 

WHEREAS,  The  people  of  the  City  of  Chicago  look  with  deep  concern  and 
jealous  eye  at  the  ultimate  solution  of  these  questions  and  should  have  a 
voice  in  their  settlement,  and  with  this  in  view  a  submission  of  the  same 
to  the  arbitrament  of  the  people  by  means  of  referendum,  may  be  advis- 
able ;  now  therefore,  be  it 

Resolved,  That  the  Mayor  be  and  he  is  hereby  authorized  and  directed, 
by  and  with  the  concurrence  of  the  City  Council,  within  thirty  days  after 
the  passage  of  this  resolution,  to  appoint  a  committee  of  seven  members 
of  this  Council,  whose  duty  it  shall  be  to : 

First — Examine  into  the  feasibility  and  practicability  of  the  municipal 
ownership  of  street  railways  in  this  city  and  the  terms  and  conditions 
under  which  this  ownership  may  be  established. 

Second — Examine  into  the  questions  of  kind  and  amount  of  compensa- 
tion and  the  conditions  for  the  renewal  of  existing  or  granting  of  new 
franchises  or  renewals,  kind  of  motive  power  best  adapted  to  various  sec- 
tions of  the  city  and  at  varying  times ;  the  condition  in  which  the  streets, 
highways  and  tunnels  are  to  be  placed  and  maintained  by  companies  using 
the  same ;  accommodations  to  be  furnished  passengers ;  amount  of  fares  ; 
commutation  tickets;  transfers;  terminal  facilities  and  switches;  extension 
of  lines ;  the  hours  of  employment  and  compensation  to  the  employes ; 
protection  of  the  citizens  against  accident,  and  penalties  for  non-compliance 
with  the  laws,  ordinances,  rules  and  regulations. 

Third — To  report  to  this  body  such  measures,  modes  of  procedure  and 
ordinances  as  shall  be  requisite  and  necessary  to  carry  into  effect  after 
their  passage  the  recommendations  of  this  commission. 


Under  authority  granted  by  the  foregoing  resolution,  His 
Honor  the  Mayor,  on  January  3,  1900,  sent  to  the  City  Council 
a  communication,  making  appointments  as  in  the  said  resolution 
provided  for,  as  follows : 

MAYOR'S  OFFICE,  } 

January  3d,   1900.  j" 

To  the  Honorable,  the  City  Council: 

GENTLEMEN — In  accordance  with  a  resolution  passed  by  your  Honorable 
Body  at  its  meeting  of  December  nth  empowering  the  Mayor  to  appoint 
seven  Aldermen  to  serve  as  a  committee  to  investigate  various  matters  in 
connection  with  the  street  railway  systems  in  the  City  of  Chicago,  I 


STREET    RAILWAY    COMMISSION.  7 

hereby  appoint  the   following  Aldermen  as  members  of  such   committee 
and  respectfully  ask  the  concurrence  of  your  Honorable  Body : 

Aid.  Foreman,  Chairman. 

Aid.   Herrmann, 

Aid.  Jackson, 

Aid.  Brennan  of  the  Tenth  Ward, 

Aid.   Raymer, 

Aid.  Mavor, 

Aid.  Schlake. 

Respectfully, 

CARTER  H.  HARRISON, 

Mayor. 

The  City  Council,  at  its  meeting  of  January  15,  1900,  adopted 
the  following  resolution,  offered  by  Alderman  Goldzier : 

WHEREAS,  Grave  doubt  exists  as  to  the  right  of  a  number  of  the  trac- 
tion companies  of  the  City  of  Chicago  to  operate  street  cars  by  cable  or 
electric  power ;  and, 

WHEREAS,  It  is  expedient  and  necessary,  previous  to  the  expiration  of 
the  various  franchises  of  such  companies,  that  this  question  shall  be 
definitely  determined,  so  as  to  fix  the  respective  rights  of  the  city  and  of 
the  traction  companies ;  therefore,  be  it 

Resolved,  That  the  Special  Committee  on  Street  Railway  matters  be 
directed  to  report  at  as  early  a  time  as  possible  all  information  attainable 
on  the  following  points : 

First — Which  of  the  traction  companies  (if  any),  to  whom  the  right  of 
operating  cars  by  other  than  animal  power  is  granted  by  the  City  of  Chi- 
cago, are  authorized  by  their  charters  from  the  State  of  Illinois  to  so 
operate  street  cars. 

Second — Whether  a  grant  by  the  city  of  the  right  to  use  other  than 
animal  power  in  street  car  service  is  valid,  when  made  to  a  company  which 
is  prohibited  by  its  State  charter  from  using  other  than  animal  power. 

Third — Whether  the  act  of  1865,  under  which  various  of  the  traction 
companies  claim  certain  rights,  confers  power  to  operate  street  railroads 
by  other  than  animal  power. 

Fourth — What  street  car  lines  (if  any)  may  be  acquired  by  the  City 
of  Chicago  by  virtue  of  the  provisions  of  the  ordinances  under  which  the 
various  street  railways  are  operating? 


8  REPORT    OF   THE 

The  City  Council,  at  its  meeting  of  February  5,  1900,  adopted 
the  following  resolution,  offered  by  Alderman  Goldzier : 

WHEREAS,  One  of  the  most  important  questions  before  the  people  of 
this  city  is  that  of  sufficient  means  of  street  car  transportation ;  and, 

WHEREAS,  The  congested  condition  of  the  streets  in  the  heart  of  the 
city  makes  it  practically  impossible  to  burden  the  surface  of  streets  with 
more  vehicles  by  increasing  the  number  of  cars  upon  the  various  surface 
roads  centering  in  the  down  town  district ;  and, 

WHEREAS,  Under  similar  conditions  in  other  cities  the  system  of  plac- 
ing street  cars  underground  has  been  found  practicable ;  therefore  be  it 

Resolved,  That  the  Special  Committee  on  street  car  matters  be  and 
they  are  instructed  to  investigate  the  question  of  the  feasibility  of  subways 
in  the  heart  of  the  city  to  accommodate  all  street  cars  which  are  now 
operated  upon  the  surface  of  streets,  and  that  said  committee  make  a  full 
report  to  this  Council  upon  this  subject,  giving  an  outline  both  of  the  tech- 
nical side  of  such  a  plan  and  of  the  proper  financial  methods  of  securing 
such  improvement. 

The  appropriation  ordinance  for  1900,  as  passed  by  the  City 
Council  March  26,  1900,  and  amended  April  4,  1900,  contained 
the  following  item : 

For  secretary  and  expenses  of  Street  Railway  Commission, 
$4,000. 

Under  the  authority  thus  conferred  the  Commission  selected 
as  secretary,  Mr.  George  C.  Sikes,  whose  service  with  the  Com- 
mission began  June  12  of  the  present  year. 

The  City  Council,  at  its  meeting  of  April  23,  1900,  adopted 
the  following  resolution,  offered  by  Alderman  Brennan  (Tenth 
Ward)  : 

Resolved,  That  the  Street  Railway  Commission  be  continued,  and  the 
Mayor  be  empowered  to  fill  such  vacancies  as  may  have  occurred. 

In  accordance  with  the  authority  conferred  by  the  foregoing 
resolution,  His  Honor  the  Mayor  appointed  Alderman  Goldzier 
to  fill  the  vacancy  in  the  Commission  caused  by  the  retirement  of 
ex-Alderman  Wm.  E.  Schlake. 


STREET    RAILWAY    COMMISSION. 


LETTER  OF  TRANSMITTAL 


To  the  Mayor  and  Aldermen  of  the  City  of  Chicago  in  Council 
Assembled: 

The  Street  Railway  Commission  created  by  resolution  of 
your  Honorable  Body  submits  herewith  the  draft  of  a  street 
railway  bill,  together  with  a  report  dealing  with  questions  of 
•street  railway  policy  that  seem  to  require  discussion  in  con- 
nection with  the  bill. 

The  Commission  also  has  under  preparation  a  bill  relating 
to  subways,  which  it  hopes  to  be  able  to  submit  to  your  Honor- 
able Body  early  in  January. 

It  is  the  recommendation  of  the  Commission  that  the  City 
Council,  if  it  approve  of  the  street  railway  bill  herewith  sub- 
mitted, give  formal  expression  of  its  approval  of  that  measure 
and  that  thereupon  the  City  Clerk  be  directed  to  transmit  one 
copy  of  the  bill  to  His  Excellency,  the  Governor  of  Illinois,  one 
copy  to  the  President  of  the  Senate  for  presentation  to  the 
Senate,  and  one  copy  to  the  Speaker  of  the  House  of  Repre- 
sentatives for  submission  to  the  House,  with  the  request  that 
the  bill  be  enacted  into  law. 

Respectfully  submitted, 
[Signed]  MILTON  J.  FOREMAN, 

Chairman. 
WM.  S.  JACKSON, 
W.  F.  BRENNAN, 
WALTER  J.  RAYMER, 
ERNST  F.  HERRMANN, 
JULIUS  GOLDZIER, 
WILLIAM  MAYOR. 

Chicago,  Illinois,  December  17,  1900. 


QUESTIONS  OF  STREET  RAILWAY  POLICY 
DISCUSSED. 


Chicago  has  more  miles  of  street  railway  than  any  other  city 
in  the  world.  That  fact,  taken  together  with  the  large  area  of 
this  city,  makes  the  street  railway  problem,  or  rather,  the  problem 
of  local  transportation,  one  of  tremendous  importance  for  Chi- 
cago ;  for  the  welfare  of  the  city  as  a  whole  and  of  its  population 
as  individuals  is  vitally  dependent  upon  the  adequacy  of  the 
system  or  systems  of  local  transportation  that  may  be  provided. 
Despite  the  importance  of  the  subject,  however,  the  street  railway 
systems  of  Chicago  have  been  permitted  to  develop  for  the  most 
part  in  a  haphazard  manner,  without  regard  to  any  well-defined 
and  comprehensive  plan  or  policy.  As  a  result  the  situation  as  it 
exists  today  is  complicated  in  the  extreme,  and  the  problem  pre- 
sented is  exceedingly  difficult  of  solution.  In  fact,  it  is  impossi- 
ble of  immediate  solution  in  any  manner  that  can  prove  entirely 
satisfactory  to  all  the  interests  concerned.  The  best  that  can  be 
done  is  to  outline  a  definite  and  comprehensive  policy  to  be  kept 
continuously  in  mind  in  dealing  with  the  different  phases  of  the 
local  transportation  problem  as  they  may  arise  for  consideration 
and  action,  this  policy  to  be  constantly  worked  toward  and  real- 
ized as  speedily  as  circumstances  will  permit. 

While  so  far  as  internal  policy  is  concerned  the  street  railway 
systems  of  Chicago  have  developed  without  much  regard  to  any 
definite  or  comprehensive  plan,  there  are  two  features  of  State 
policy  regarding  street  railways  which  Chicago  has  been  chiefly 
instrumental  in  forcing  the  State  to  adopt,  that  may  be  accepted  as 
well  established.  One  is  the  principle  of  local  control.  The 
other  is  the  policy  of  short  term  grants. 

The  first  street  railway  franchise  under  which  a  railway  was 
constructed  in  Chicago,  granted  by  the  City  Council  in  1858, 
was  for  a  period  of  twenty-five  years,  and  gave  to  the  city  the 


12 


STREET    RAILWAY    COMMISSION 


right  of  purchase  at  the  end  of  that  period.  The  Legislature  of 
1865,  however,  despite  local  popular  protest,  passed  over  the 
veto  of  Governor  Oglesby  a  law  extending,  or  purporting  to 
extend,  from  twenty-five  to  ninety-nine  years,  not  only  the  char- 
ters of  the  companies  then  operating  horse  railways  in  the  city 
of  Chicago,  but  their  franchise  rights  in  the  public  streets  of  the 
city  as  well.  In  response  to  the  public  protest  against  the  prin- 
ciple underlying  this  act,  a  provision  was  inserted  in  the  consti- 
tution of  1870  designed  forever  thereafter  to  prevent  interference 
with  the  principle  of  local  control  in  such  matters.  That  pro- 
vision is :  "No  law  shall  be  passed  by  the  General  Assembly 
granting  the  right  to  construct  and  operate  a  street  railroad 
within  any  city,  town  or  incorporated  village  without  requiring 
the  consent  of  the  local  authorities  having  the  control  of  the  street 
or  highway  proposed  to  be  occupied  by  such  street  railroad." 

Under  the  new  constitution  the  Legislature  in  1874  passed  a 
general  law  relating  to  horse  railroads,  which,  among  other  things, 
limited  to  twenty  years  all  grants  thereafter  to  be  made  by  any 
local  authorities. 

From  the  discussion  growing  out  of  street  railway  measures 
enacted  or  considered  by  the  last  three  legislative  assemblies  of 
Illinois  it  plainly  appears  to  be  the  popular  desire  that  the  prin- 
ciple of  local  control  and  the  policy  of  short  term  grants  be  main- 
tained. 

Starting  with  these  two  features  of  State  policy  as  a  basis  the 
Street  Railway  Commission,  in  accordance  with  the  instructions 
of  the  City  Council  given  in  the  resolution  creating  the  Commis- 
sion, is  attempting  to  formulate  such  other  features  of  street 
railway  policy  and  to  outline  such  courses  of  action  as  the  situa- 
tion seems  to  require.  As  said  before,  the  problem  presented  is 
complicated  and  difficult  of  solution  and  the  Commission  has  not 
been  able,  in  the  time  at  its  disposal,  to  go  thoroughly  into  all 
its  phases.  It  has  given  attention  first  to  those  aspects  of  the 
question  that  demand  consideration  in  connection  with  proposed 
State  legislation.  The  resolution  creating  the  Commission  points 
out  that  the  existing  laws  and  ordinances  concerning  street  rail- 
way franchises  and  the  municipal  regulations  of  the  operation  of 
street  railway  systems  are  antiquated  and  were  enacted  at  a  time 
when  the  city  of  Chicago  had  not  reached  its  present  stage  of 
development,  and  that  such  acts  and  ordinances  are  wholly 


TEXT    OF    THE    REPORT.  13 

inadequate  to  meet  the  needs  and  requirements  of  the  city  of 
Chicago  at  the  present  time.  Fully  agreeing  with  this  view,  and 
believing  that  legislative  action  is  a  necessary  prerequisite  to  any 
thoroughly  satisfactory  solution  of  the  problem  by  the  City  Coun- 
cil, the  Commission,  as  the  first  step  in  its  work,  has  prepared  and 
herewith  presents  the  draft  of  a  street  railway  bill,  the  purpose  of 
which  is  to  confer  upon  the  municipality  the  power  to  work  out 
such  a  solution  of  the  street  railway  problem  as  may  best  suit 
its  inhabitants,  without,  however,  conferring  upon  the  present 
generation  the  power  needlessly  to  tie  the  hands  of  succeeding 
generations. 

Except  for  two  features,  the  bill  presented  is  a  mere  grant  of 
power  to  local  authorities.  The  operation  of  the  bill,  if  enacted 
into  law,  is  intended  to  insure  proper  publicity  of  the  affairs  of 
street  railway  companies  and  to  prevent  future  overcapitalization 
without  action  on  the  part  of  local  authorities.  The  provisions 
of  the  bill  in  other  respects,  however,  are  in  the  nature  of  enabling 
legislation,  and  merely  confer  upon  local  authorities  power,  sub- 
ject to  restrictions  and  safeguards,  to  deal  with  street  railway 
problems  in  such  manner  as  may  seem  to  them  wise.  No 
attempt  is  made  in  the  bill  to  settle  or  determine  any  question  of 
policy  for  any  municipality. 

Sections  2,  3,  4  and  5  of  the  bill  submitted  are  substantially 
the  provisions  of  the  existing  street  railway  law.  Section  7  is  a 
modification  of  the  present  statutory  provision  relating  to  front- 
age consents  that  is  embodied  in  the  city  and  village  act.  The 
other  sections  of  the  bill  embody  street  railway  provisions  that 
are  new  to  Illinois. 

In  framing  the  bill  the  commission  naturally  has  had  the 
needs  of  Chicago  particularly  in  mind,  but  of  necessity  a  bill 
designed  to  displace  the  existing  street  railway  law  must  be 
general  in  its  scope.  For  the  most  part,  however,  the  important 
new  features  of  the  bill  are  made  applicable  to  cities  only.  The 
general  aim  has  been  to  change  as  little  as  possible  the  status 
and  powers  under  existing  street  railway  laws  of  municipalities 
other  than  cities. 


The  discussion  that  follows  is  not  confined  to  points  embodied 
in  the  bill  submitted,   but  consideration   is  also  given   to   some 


14  STREET    RAILWAY    COMMISSION 

features  of  street  railway  policy  that  seem  to  require  treatment 
in-  this  connection. 

The  most  important  questions  of  street  railway  policy  with 
which  the  Commission  has  deemed  itself  called  upon  to  deal,  may 
be  considered  under  the  following  headings  : 

I.  UNIFICATION  OF  MANAGEMENT. 

The  street  railway  business  should  be  recognized  as  a  monop- 
oly business  and  treated  accordingly. 

II.  PUBLIC  CONTROL  AND  DURATION  OF  GRANTS. 

These  two  subjects  should  be  treated  together  because  of  the 
intimate  relations  they  bear  to  each  other.  If  street  railways 
are  to  remain  under  private  management  some  means  must  be 
devised  for  rendering  public  control  more  effective.  The  Com- 
mission favors  the  reservation  to  the  Council  of  broad  powers  of 
control  and  for  the  exercise  of  the  powers  thus  reserved  it  rec- 
ommends the  creation  of  a  new  standing  committee  on  Local 
Transportation,  modeled  in  the  main  after  the  Committee  on 
Track  Elevation.  This  committee  should  have  regular  quarters 
in  the  City  Hall,  which  should  be  open  during  business  hours 
for  receiving  complaints  from  citizens.  The  committee  should 
have  at  its  service  such  expert  and  clerical  assistance  as  might 
be  found  necessary. 

III.  MUNICIPAL  OWNERSHIP. 

Cities  should  possess  the  power,  under  proper  restrictions  and 
safeguards,  to  own  and  operate  street  railways.  The  city  may 
not  deem  it  expedient  to  exercise  this  power,  but  with  such  a 
power  in  reserve  to  be  used  in  case  of  need,  the  city  would  be  in 
a  position  to  make  much  better  terms  with  private  corporations. 
The  Commission,  while  believing  it  wise  and  important  to  give 
the  power  to  operate,  would  not  look  wth  favor  upon  the  propo- 
sition to  have  the  city  of  Chicago  operate  street  railways  in  the 
immediate  future.  It  has  no  notion  that  such  a  proposition  would 
meet  with  the  favor  of  the  people  of  Chicago  at  this  time.  Prob- 
lems of  the  future  may  safely  be  left  to  the  decision  of  the  future. 
The  Commission  is  of  the  opinion,  however,  that  it  would  be  wise 
for  the  city,  at  the  earliest  practicable  time,  to  acquire  ownership 
of  the  trackage  and  of  whatever  may  form  a  part  of  the  public 


TEXT    OF    THE    REPORT.  15 

street,  without  going  to  the  extent  of  ownership  and  operation 
of  rolling  stock. 

IV.  REFERENDUM. 

In  so  far  as  practicable,  the  people  should  be  given  a  direct 
voice  through  the  referendum  in  the  settlement  of  the  most  im- 
portant questions  of  street  railway  policy. 

V.  PUBLICITY. 

Street  railway  companies  are  entrusted  by  the  public  with  the 
management  of  a  public  business.  The  affairs  of  such  companies, 
therefore,  should  be  open  and  known  to  the  public  to  the  same 
extent  as  if  the  business  were  managed  by  the  public  directly. 

VI.  CONTROL  OF  CAPITALIZATION. 

The  law  should  forbid  overcapitalization. 

VII.  FRONTAGE  LAW. 

Frontage  consents  should  be  required  only  when  it  is  first 
sought  to  lay  down  tracks  upon  a  street.  The  right  of  abutting 
property  owners  to  prevent  a  street  from  being  used  for  street 
railway  purposes,  regardless  of  the  public  need  for  a  proposed 
railway,  should  not  be  absolute  and  unqualified. 

VIII.  LABOR  POLICY. 

The  public  has  a  right  to  demand  uninterrupted  street  railway 
service.  To  that  end,  it  has  a  right  to  insist  that  everything 
reasonably  possible  be  done  to  prevent  strikes  and  lock-outs. 
Companies,  in  accepting  grants,  should  be  required  to  submit  all 
labor  disputes  to  arbitration. 

IX.  MOTIVE  POWER. 

The  Chicago  street  railway  field  is  profitable  enough  to  war- 
rant the  use  here  of  the  most  desirable  form  of  motive  power 
which  experience  has  shown  to  be  practical.  The  overhead  trol- 
ley should  not  be  permitted  in  the  business  district. 

x.r  .SUBWAYS. 

The  Commission  is  of  the  opinion,  in  so  far  as  it  is  qualified 


1 6  STREET    RAILWAY    COMMISSION 

to  judge  without  the  assistance  of  engineering  experts,  that 
Chicago  should  have  a  system  of  subways  in  the  down-town  dis- 
trict for  the  accommodation  of  street  cars  entering  that  district, 
thus  making  possible  the  removal  of  such  cars  from  the  surface 
of  the  streets  within  such  subway  district.  The  subject,  however, 
is  one  calling  for  a  careful  and  detailed  investigation  by  engineers 
employed  for  that  purpose  by  the  city  before  any  decisive  steps 
are  taken.  Legislation  should  be  secured  at  once  permitting  the 
construction  and  ownership  of  such  subways  either  by  the  city 
or  by  a  private  corporation,  which  legislation  should  authorize 
the  people  themselves  to  say,  through  the  referendum,  which  form 
of  ownership  they  prefer,  or  whether  they  want  subways  at  alL 

XL    RATE  OF  FARE  AND   COMPENSATION. 

These  are  matters  requiring  a  more  careful  study  than  the 
Commission  has  yet  been  able  to  make  of  them.  The  two  should 
be  considered  together,  for  obviously  the  lowering  of  fares  would 
reduce  the  possibilities  in  the  way  of  compensation  to  be  paid 
into  the  public  treasury,  and  vice  versa.  The  question  of  low 
fares  vs.  compensation  and  the  question  of  the  uniform  fare  as 
opposed  to  graded  fares  or  the  zone  system  of  fares  present  them- 
selves for  consideration.  The  Commission  believes  the  question 
as  to  the  amount  of  compensation  for  franchise  grants  should 
be  left  open  until  the  terms  of  the  grant  otherwise  are  virtually 
decided  upon. 

XII.  CO-ORDINATION  OF  SERVICE. 

The  Commission  is  of  the  opinion  that  there  should  be  more 
co-ordination  between  surface  lines  and  steam  and  elevated  roads. 

XIII.  LEGAL  QUESTIONS— THE  99   YEAR    ACT. 

When  the  companies  now  in  control  in  Chicago  receive  any 
further  grant  of  privileges  from  the  city  they  should  be  required, 
as  a  condition  of  such  grant,  to  renounce  any  claim  of  rights  under 
the  so-called  Ninety-nine  Year  Act  of  1865. 


These  various  features  of  policy,  in  the  order  enumerated,  will 
now  be  considered  more  at  length. 


TEXT    OF_THE    REPORT.  17 


UNIFICATION  OF  MANAGEMENT. 

The  theory  underlying  the  street  railway  policy  of  Chicago 
heretofore,  in  so  far  as  Chicago  may  be  said  to  have  had  a  policy 
on  this  subject,  has  been  that  the  street  railway  business  is  a 
competitive  business;  that  competition  should  be  fostered  in  the 
interest  of  the  public  and  that  the  possibility  of  competition  should 
be  ever  present  as  a  means  of  keeping  traction  managers  alive  to 
their  duties  to  the  public.  That  theory  is  incorrect  and  unsound. 
Moreover,  in  practice  it  is  everywhere  found  impossible  to  in- 
duce, persuade,  require  or  compel  public  service  corporations 
engaged  in  the  same  line  of  business  to  compete  with  one  another 
except  for  comparatively  short  periods  of  time.  Sooner  or  later 
rival  companies  of  this  kind  will  consolidate,  or  they  will  divide 
the  territory  among  themselves  and  each  will  keep  in  its  own 
territory,  or  there  will  be  secret  agreements  or  understandings 
that  will  suffice  to  eliminate  all  effective  competition.  The  various 
gas  companies  of  Chicago  which  were  given  franchises  on  the 
promise  that  they  would  compete  with  one  another  are  now  con- 
solidated under  one  management.  The  principal  street  railway 
companies  have  carved  Chicago  into  sections,  each'  agreeing, 
tacitly  at  least,  to  serve  a  particular  section  and  not  to  encroach 
upon  the  territory  of  others.  Where  one  company  has  been  given 
a  franchise  to  enter  the  field  of  another  company,  as  in  the  case 
•of  the  General  Electric,  which  was  authorized  to  invade  City  Rail- 
way territory,  the  usual  effect  has  been  only  to  increase  the 
amount  of  outstanding  securities  upon  which  the  people  will  be 
expected  to  pay  dividends. 

One  street  railway  company  can  serve  the  city  better  and  more 
economically  than  can  several.  The  street  railway  business  is  by 
its  nature  a  monopoly  business.  Therefore,  instead  of  trying  to 
foster  unnatural  competition  which  cannot  possibly  be  main- 
tained for  any  considerable  period  of  time,  the  wise  thing  to  do 
would  seem  to  be  to  recognize  the  monopoly  nature  of  the  street 
railway  business  and  to  deal  with  it  accordingly. 

If  the  slate  were  clean,  so  to  speak,  and  the  city  of  Chicago 
were  in  a  position  to  deal  with  the  problem  in  the  manner  that 
might  be  deemed  most  wise,  the  Commission  would  unhesitat- 
ingly recommend  granting  to  a  single  corporation  the  exclusive 


l8  STREET    RAILWAY    COMMISSION 

right  to  operate  street  railways  within  the  limits  of  the  city,  sub- 
ject, of  course,  to  the  conditions  that  should  logically  attend  such 
a  grant.  It  would  under  no  circumstances  favor  authorizing  a 
competing  company  to  enter  the  field.  If  the  company  given  the 
exclusive  right  to  provide  street  railway  service  could  not  or 
would  not  satisfy  the  public,  the  proper  remedy  would  be  for  the 
city  to  terminate  the  grant  and  take  possession  of  the  property  of 
the  company  suitable  to  and  used  by  it  for  street  railway  pur- 
poses, compensation  to  be  made  for  the  same  on  the  basis  of  its 
value  for  railway  purposes  but  without  any  allowance  for  fran- 
chise value. 

But  the  slate  is  not  clean.  Existing  complications  must  be 
reckoned  with.  Taking  the  situation  as  it  is,  the  Commission 
would  discourage  permitting  any  new  company  to  enter  the  field 
except,  perhaps,  as  a  successor  to  some  or  all  of  the  companies 
now  in  control,  in  the  remote  and  improbable  contingency  that 
some  of  such  companies  might  be  unwilling  to  deal  with  the  city 
on  terms  that  could  be  accepted.  The  Commission  does  not  go 
to  the  extent  of  favoring  an  actual  legal  monopoly.  It  does  not 
believe  that  to  be  necessary  or  expedient.  But  it  does  believe 
that  the  people  of  Chicago  are  ready  to  deal  with  the  street  rail- 
way business  as  a  monopoly  business  and  that  if  the  decision  is 
left  to  them  no  franchise  will  be  granted  to  a  competing  company 
so  long  as  the  company  in  control  is  making  anything  like  reason- 
able efforts  to  satisfy  the  public.  Therefore  the  Commission  has 
provided  (Section  10  of  the  proposed  bill)  that  no  street  railway 
franchise  shall  be  granted  to  a  competing  company  unless  the 
ordinance  making  such  grant  be  approved  by  the  people  by  direct 
vote.  Such  a  provision,  the  Commission  believes,  will  amount 
to  virtual  assurance  of  a  monopoly  to  any  company  disposed  to 
deal  fairly  with  the  people. 

Besides  opposing  further  grants  to  competing  companies,  the 
Commission  would  recommend  that  the  city  use  its  influence  to 
bring  about  unification  of  management,  so  far  as  possible,  either 
through  actual  consolidation  of  the  different  companies  now  in 
existence,  or  through  operating  agreements,  to  the  end  that  the 
street  railways  of  Chicago  may  be  operated  upon  the  basis  of  a 
unified  system.  Therefore  the  Commission,  in  the  bill  submitted 
(Section  26),  authorizes  street  railway  companies  to  sell  or  lease 
their  property  or  to  consolidate  or  make  operating  agreements 


TEXT    OF    THE    REPORT.  19 

with  other  companies,  subject  to  the  approval  of  the  public 
authorities  granting  the  right  to  construct  the  railways  in  ques- 
tion. The  provision  calling  for  the  approval  of  the  public  author- 
ities is  important,  as  otherwise  sales  or  agreements  might  be 
made  in  derogation  of  the  public  interests. 

Of  course,  if  a  company  is  to  be  given  a  grant  on  the  assump- 
tion that  it  is  to  be  permitted  to  occupy  the  field  alone,  that 
company,  on  its  part,  must  undertake  to  occupy  the  field  com- 
pletely and  to  the  satisfaction  of  the  public.  It  must  build  and 
operate  not  alone  such  lines  as  it  chooses,  but  it  must  furnish  all 
the  service  within  the  territory  assigned  to  it  which  the  public 
interests  may  require.  Especially  must  such  a  company  be  re- 
quired to  extend  its  lines  or  to  establish  new  lines  as  needed.  It 
would  be  well  for  the  City  Council,  therefore,  in  grants  that  may 
be  made  hereafter,  to  reserve  the  right  to  require  the  establish- 
ment of  new  lines  as  needed. 


n. 

PUBLIC  CONTROL  AND  DURATION  OF  GRANTS. 

These  two  matters  should  be  considered  together  because  of 
the  intimate  relation  one  bears  to  the  other. 

The  primary  object  in  granting  to  private  corporations  the 
right  to  encumber  the  public  streets  with  car  tracks  is  to  secure 
street  car  service.  Unless  this  primary  object  is  accomplished 
the  street  railway  policy  of  the  city  must  be  said  to  be  a  failure, 
no  matter  how  large  revenues  may  be  secured  for  the  public 
treasury,  nor  how  advantageous  for  the  city  the  terms  of  a  fran- 
chise grant  may  be  in  other  respects.  How  to  secure  adequate 
service  at  reasonable  rates  is,  therefore,  the  essence  of  the  street 
railway  problem.  All  other  considerations,  comparatively  speak- 
ing, are  of  secondary  importance. 

One  way  that  suggests  itself  of  securing  adequate  service  is 
to  stipulate  for  it  in  the  franchise.  But  franchise  stipulations 
of  this  kind  are  not  self-executing.  It  is  one  thing  to  insert  in 
a  grant  provisions  requiring  certain  things  in  the  way  of  service. 
It  is  quite  another  matter  actually  to  get  the  things  done.  More- 


20  STREET    RAILWAY    COMMISSION 

over,  it  is  absolutely  impossible  to  make  stipulations  today  that 
will  fit  the  changed  conditions  of  tomorrow.     No  person  is  wise 
enough  to  formulate  for  insertion  into  a  street  railway  franchise 
that  is  to  be  interpreted  as  a  contract,  all  the  stipulations  that 
will  be  necessary  to  insure  good  service  for  the  period,  say,  of  a 
generation  for  which  the  franchise  may  run.    In  fact,  the  more  a 
street  railway  franchise  partakes  of  the  nature  of  a  contract, 
which  cannot  be  altered  in  any  material  respect  except  with  the 
consent  of  both  parties,  even  to  meet  changes  in  conditions  which 
could  not  be  foreseen  at  the  time  the  grant  was  made,  the  less 
satisfactory  is  it  certain  to  prove  in  operation  and  the  more  is  it 
likely  to  militate  against  healthy  and  progressive  development. 
On  the  other  hand,  the  more  such  a  franchise  partakes  of  the 
nature  of  a  mere  license,  being  subject  to  complete  regulation  and 
control  by  the  public  authorities  at  all  times,  the  better  for  the 
public  at  large.     Mere  property  interests  of  a  government,  like 
the  property  interests  of  an  individual,  may  properly  enough  be 
contracted  away.     But  governing  authorities  ought  not,  by  con- 
tract, to  divest  themselves  of  governing  functions.    Control  of  the 
public  streets  and  of  the  public  means  of  transportation  thereon, 
is  a  governing  function  which  should,  so  far  as  possible,  be  vested 
in  the  proper  governing  authorities  at  all  times.     Such  control 
should  be  continuous  and  properly  ought  not  to  be  surrendered 
beyond  recall,  either  by  contract  or  in  any  other  manner.     But, 
of  course,  it  is  surrendered  to  a  greater  or  less  degree  by  the 
ordinary  definite  term  street  railway  grant  with  which  we  are 
familiar.     The    present    widespread    dissatisfaction  with    street 
railway  management  in  private  hands,  it  would  seem,  may  in 
large  measure  fairly  be  attributed  to  the  fact  that  public  authori- 
ties have  not  retained  continuous  control,  as  they  should  have 
done,  but  have  permitted  themselves  to  be  divested  of  it  by  con- 
tract.   British  and  German  cities  generally  have  a  reputation  for 
marked  ability  in  making  contracts  with  public  service  corpora- 
tions, and  some  of  the  agreements  made  by  those  cities,  conferring 
franchise  rights,  are  remarkable  for  the  ingenuity  and  detail  with 
which  they  seek  to  guard  against  future  contingencies.     But  the 
results  under  these  very  carefully  drawn  contracts  do  not  seem 
to  be  satisfactory,  because,  as  the  contract  periods  expire,  British 
and  German  cities  are  rapidly  adopting  the  policy  of  municipaliza- 
tion.    Some  contend  that  the  careful  restrictions  of  the  contracts 


TEXT    OF    THE    REPORT.  21 

made  by  British  and  German  cities  tend  to  hamper  and  discourage 
private  enterprise  and  thus  to  preclude  satisfactory  street  railway 
development  under  private  management.  Whether  this  or  some 
other  explanation  be  accepted  as  the  correct  one,  the  fact  remain! 
that  the  system  of  regulation  by  contract  has  not  proven  satis- 
factory in  British  and  German  cities,  as  attested  by  the  fact  that, 
this  system  is  being  abandoned  with  considerable  rapidity  for 
the  policy  of  municipalizaton.  Prof.  James,  of  the  University 
of  Chicago,  who  has  lately  returned  from  a  trip  of  investigation 
of  German  cities,  tells  an  incident  which  helps  to  an  understand- 
ing of  the  movement  toward  municipal  ownership  in  Germany. 
In  reply  to  a  question  as  to  the  reason  why  the  city  of  Cologne 
was  proceeding  to  take  over  its  tramways,  the  Mayor  of  that 
city  said  to  Prof.  James :  "We  are  taking  over  the  tramways 
because  it  was  found  impossible  thoroughly  to  safeguard  the 
public  interests  under  any  contract  with  a  private  corporation 
that  could  be  drawn." 

There  is  unquestionably  in  American  cities  a  strong  popular 
trend  in  the  direction  of  municipalization  of  street  railways.  It 
seems  also  to  be  unquestionable  that  the  growth  of  municipaliza- 
tion sentiment  is  due  in  large  measure  to  the  failure,  or  supposed 
failure,  of  many  American  cities  to  get  satisfactory  results  from 
public  service  corporations  with  which  they  have  attempted  to 
deal  on  the  contract  basis. 

One  of  two  things  appears  to  be  inevitable.  Either  a  system 
of  really  effective  continuing  public  control  over  street  railways 
must  be  developed  or  street  railways  are  virtually  certain  to  be 
municipalized  sooner  or  later.  Manifestly,  therefore,  it  should 
be  the  part  of  those  who  look  with  disfavor  upon  the  idea  of 
municipalization  to  do  what  they  can  to  assist  in  developing  a 
system  of  control  over  street  railways  that  will  prove  satisfactory 
to  the  public. 

In  attempting  to  devise  a  system  of  effective  public  control, 
the  important  considerations  are :  ( i )  That  adequate  powers  of 
control  be  reserved  to  the  governing  authorities  to  be  exercised 
by  such  authorities  in  their  discretion  at  any  time;  (2)  that 
special  machinery  be  created  for  the  purpose  of  insuring  the  in- 
telligent exercise  of  such  powers  of  control  in  the  interest  of  the 
public. 

As  has  been  said,  franchise  stipulations  designed  to  insure 


22  STREET    RAILWAY    COMMISSION 

adequate  service  are  not  self  executing.  There  must  be  some 
supervising  body,  whose  special  business  it  is  to  see  that  the  things 
stipulated  are  actually  done.  Moreover,  specific  franchise  stipu- 
lations cannot  possibly  cover  all  points  in  relation  to  service  that 
may  arise.  The  proper  governing  authorities  should  be  able  at 
any  time  to  make  such  regulations,  or  to  order  such  improvements 
in  service,  as  the  needs  of  the  public  may  require.  Therefore 
broad  powers  of  control  should  be  reserved  to  the  governing 
authorities,  to  be  exercised  as  need  may  arise.  Section  6  of  the 
proposed  bill  aims  to  reserve  to  city  councils  broader  powers  of 
control  than  are  now  possessed.  If  this  bill  should  not  become 
a  law  before  the  settlement  of  the  pending  franchise-renewal 
problem,  the  City  Council  by  all  means  ought  specifically  to 
reserve  such  powers  of  control  in  any  grant  that  may  be  made. 

Having  reserved  the  right  of  control,  special  governmental 
machinery  for  the  exercise  of  such  right  must  be  devised  if  the 
control  is  to  be  really  effective  and  of  benefit  to  the  public.  Chi- 
cago today  has  rights  of  control  which  are  not  exercised  for  the 
lack  of  any  supervising  body  whose  special  business  it  is  to 
recommend  regulations  for  the  improvement  of  the  service  and  to 
see  that  existing  regulations  are  properly  enforced. 

What  should  this  machinery  be?  Two  plans  or  methods  are 
naturally  suggested  for  consideration.  One  is  the  creation  of  a 
Commission  to  be  entirely  independent  of  the  Council.  The  other 
is  to  have  the  desired  machinery  of  control  developed  within  the 
Council.  The  Street  Railway  Commission  gives  its  approval  to 
the  latter  plan. 

It  would  recommend  that  a  new  standing  committee  of  the 
Council  be  created,  to  be  known,  perhaps,  as  the  Committee  on 
Local  Transportation.  This  committee  in  many  respects  might 
well  be  modeled  after  the  Track  Elevation  Committee.  It  should 
not  be  large  in  number.  It  should  have  regular  quarters  in  the 
City  Hall,  which  should  at  all  times  during  business  hours  be 
open  for  receiving  complaints  concerning  service  from  citizens, 
and  for  the  imparting  of  information.  This  committee  should 
have  such  expert  and  clerical  assistants  as  might  be  required. 
These  assistants  should  be  under  the  protection  of  the  civil 
service  law,  to  the  end  that  their  tenure  of  employment  should  be 
permanent  or  during  good  behavior,  in  order  that  the  city  may 
have  the  benefit  of  their  experience  after  they  have  become 


TEXT    OF    THE    REPORT.  23 

familiar  with  the  problems  to  be  dealt  with.  The  most  important 
feature  of  this  plan  is  the  one  providing  that  the  Council,  through 
its  committee  on  this  subject,  should  have  at  its  service  a  per- 
manent force  of  experts  to  advise  and  assist  it  in  dealing  with 
the  various  problems  of  local  transportation  as  they  may  arise. 

Naturally,  too,  this  same  committee,  with  its  expert  advisers 
and  its  mass  of  accumulated  information  and  experience,  is  the 
one  to  which  ordinances  conferring  the  right  to  construct  or 
operate  street  railways  would  be  referred.  This  committee,  act- 
ing for  the  Council,  would  be  better  qualified  to  conduct  the 
preliminary  negotiations  with  a  private  corporation  over  fran- 
chise terms  than  would  a  committee  that  is  only  occasionally  called 
upon  to  consider  street  railway  matters.  The  present  plan  of  re- 
ferring street  railway  ordinances  to  one  of  three  committees 
(Streets  and  Alleys,  West,  North  or  South,  as  the  case  may  be), 
according  to  the  part  of  the  city  in  which  it  may  be  proposed  to 
locate  the  road,  is  especially  objectionable  as  tending  to  foster 
the  sectionalism  which  it  should  be  the  object  of  a  well  considered 
street  railway  policy  to  obliterate.  If  the  street  railway  systems 
of  the  city  ought  to  be  unified  as  far  as  possible,  and  the  Commis- 
sion believes  they  should  be,  the  City  Council  itself  ought  to  take 
the  first  step  in  that  direction,  by  having  one  committee  to  con- 
sider all  street  railway  matters,  rather  than  three  committees, 
made  up  on  strictly  sectional  lines,  as  is  the  case  at  present. 

ALL  GRANTS  SHOULD  EXPIRE  TOGETHER. 

In  order  for  the  city  to  control  the  situation  satisfactorily  it 
must  be  able  to  deal  with  the  problem  as  an  entirety  at  any  given 
time,  which  it  is  not  in  a  position  to  do  when  some  outstanding 
grants  expire  at  one  time  and  some  at  other  times.  It  ought  to 
be  the  policy  of  the  city  in  the  future,  therefore,  to  make  pro- 
vision to  have  all  grants  expire  at  the  same  time.  This  is  a 
matter  of  much  importance. 

DURATION  OF  GRANTS. 

It  was  said  at  the  opening  of  the  discussion  under  this  heading 
that  the  question  of  duration  of  grants  was  closely  related  to  the 
problem  of  public  control.  The  nature  of  that  relation  will  now 
be  considered. 

As  has  already  been  stated,  efforts  to  control  public  service 


t 


24  STREET    RAILWAY    COMMISSION 

corporations  through  contractual  agreements  generally  have 
proven  unsatisfactory  wherever  tried,  whether  in  this  country  or 
in  Europe.  The  Commission,  in  the  plan  recommended  for  the 
reservation  of  broad  powers  of  control,  hopes  to  secure  better 
results  than  can  possibly  be  secured  through  contract  stipulation* 
in  the  franchise  with  reference  to  service.  But  the  Commission 
does  not  delude  itself  with  the  hope  that  the  results  under  this 
plan  will  be  entirely  satisfactory  and  perhaps  they  may  not  in 
practice  prove  even  approximately  so.  It  is  difficult  to  compel 
a  corporation  enjoying  definite  term  rights  in  the  public  streets 
to  do  what  it  may  desire  for  reasons  of  self-interest  not  to  do. 
The  only  way  for  the  city  to  be  certain  of  its  ability  to  exercise 
complete  control  over  its  public  streets  and  over  the  means  of 
transportation  thereon  is  for  it  not  to  surrender  beyond  recall 
any  rights  of  use  or  of  occupation  in  such  streets.  The  city  can 
control  completely  only  when  it  is  in  a  position  to  terminate  at 
any  time  the  right  of  use  claimed  by  any  person  or  corporation 
that  may  choose  to  defy  the  will  of  the  city  in  any  respect.  In 
other  words,  the  grant  terminable  at  any  time  at  the  will  of  the 
city  authorities  is  the  only  kind  under  which  the  city  can  be  sure 
of  its  ability  to  dominate  the  situation  at  all  times.  And  it  is 
precisely  in  the  communities  where  that  form  of  grant  obtains 
that  the  best  results  generally  are  secured,  and  it  is  in  such  com- 
munities that  the  relations  between  the  corporations  and  the  pub- 
lic are  the  most  satisfactory.  We  refer  to  the  State  of  Massa- 
chusetts and  to  the  city  of  Washington,  D.  C. 

In  Massachusetts  street  railway  grants  do  not  run  for  any 
definite  period.  A  company  is  simply  granted  a  "location,"  that 
is,  it  is  permitted  to  lay  its  tracks  in  a  street.  But  the  location 
may  be  revoked  at  any  time.  Until  recently  the  power  of  revoca- 
tion rested  absolutely  with  the  local  authorities,  but  the  act  has 
lately  been  amended  so  as  to  give  the  right  of  appeal  to  certain 
State  authorities  where  the  company  may  feel  that  it  has  been 
treated  unfairly.  But  the  principle  of  a  grant  revocable  by  the 
public  authorities  at  will  has  not  been  altered.  This  power  of 
revocation,  it  is  true,  has  seldom  been  used,  but  its  existence  ha* 
served  to  keep  the  corporations  on  their  good  behavior  at  all 
times,  and  to  keep  the  public  authorities  complete  masters  of 
the  situation  at  all  times.  Moreover,  capital  has  not  been  wanting 


TEXT    OF    THE    REPORT.  25 

for  street  railway  enterprises  in  Massachusetts  under  these  con- 
ditions. 

The  only  careful  and  thorough-going  official  study  ever  made 
in  this  country  of  the  subject  of  the  proper  duration  of  street 
railway  grants,  so  far  as  this  Commission  is  aware,  was  that 
made  by  a  Massachusetts  committee,  of  which  Mr.  Charles  Fran- 
cis Adams  was  chairman.  The  report  of  that  committee,  which 
was  submitted  to  the  Legislature  of  Massachusetts  in  February, 
1898,  is  so  enlightening  and  instructive  that  lengthy  extracts  from 
it  are  appended  to  this  report.  The  Massachusetts  committee, 
after  an  examination  of  the  different  varieties  of  grant  in  use, 
declared  in  favor  of  the  continuation  of  the  Massachusetts  sys- 
tem of  indefinite  term  grants.  "In  theory,"  it  says,  "such  a  fran- 
chise is  to  the  last  degree  illogical."  Yet  it  cannot  be  said,  the 
Commission  further  adds,  "that  the  system  has  for  the  half 
century  it  has  been  in  use  worked  otherwise  than  on  the  whole 
satisfactorily."  On  the  other  hand,  the  term  franchise,  wherever 
its  results  were  studied,  the  committee  says,  "has  been  productive 
of  dissension,  poor  service,  scandals  and  unhealthy  political  ac- 
tion." The  committee  adds:  "There  is  probably  no  possible 
system  productive  of  only  good  results  and  in  no  respect  open  to 
criticism;  but,  in  fairness,  the  committee  found  itself  forced  to 
conclude  that  the  Massachusetts  franchise,  which  might,  perhaps, 
not  improperly  be  termed  a  tenure  good  behavior,  would  in  its 
practical  results  compare  favorably  with  any.  Certainly  those 
results  are  as  immeasurably  as  they  are  undeniably  better  than 
the  results  as  yet  produced  in  Great  Britain." 

The  important  thing  in  the  testimony  of  the  Massachusetts 
committee  is  the  assertion  that  the  Massachusetts  system  of  in- 
definite term  grants  has  worked  well  in  practice.  It  is  important 
to  know,  too,  that  the  system  is  satisfactory  both  to  the  compa- 
nies and  to  the  municipalities,  for  at  the  hearings  of  the  committee 
neither  asked  for  any  change  in  the  form  of  franchise  grant  in 
this  respect,  except  that  the  companies  suggested  some  "par- 
tial measures  of  protection  against  possible  orders  of  sudden, 
ill-considered  or  aggressive  revocation." 

Turning  to  the  city  of  Washington,  we  find  this  same  indefi- 
nite term  grant  in  use,  with  most  satisfactory  results.  Washing- 
ton is  one  of  the  smaller  cities  of  the  country,  and  therefore  does 
not  furnish  as  profitable  a  field  of  operation  from  the  street  rail- 


26  STREET    RAILWAY    COMMISSION 

way  manager's  point  of  view  as  do  the  larger  centers  of  popula- 
tion like  Chicago,  Philadelphia  or  New  York.  Nevertheless, 
Washington  has  the  best  street  railway  service  of  any  city  in 
the  country  and  it  has  led  most  other  cities  in  the  introduction 
of  improvements  in  service. 

In  Washington  franchise  grants  are  conferred  by  act  of  Con- 
gress, and  all  grants  are  subject  to  alteration,  amendment  or 
repeal  at  any  time,  at  the  will  of  Congress.  Under  the  power  thus 
reserved  Congress  orders  such  improvements  in  service  as  it  may 
deem  desirable,  and  whenever  it  deems  them  desirable,  and  the 
orders  are  at  once  executed  without  parley  or  litigation.  The 
overhead  trolley  was  never  permitted  in  Washington.  When 
the  underground  trolley  was  shown  to  be  feasible,  Congress  passed 
an  act  reading  in  part  as  follows  :* 

"That  the  said  Metropolitan  Railroad  Company  be,  and  the 
same  is  hereby  authorized,  empowered  and  required  to  equip  and 
operate  the  lines  of  its  cars  upon  and  along  *  *  *  with  an 
underground  electric  system  for  the  propulsion  of  such  cars." 

Under  this  order  Washington  was  the  first  city  in  the  country 
to  secure  the  underground  trolley. 

Under  the  reserved  power  to  alter,  amend  or  repeal  grants  at 
will  Congress  has  required  different  companies  to  make  arrange- 
ments for  issuing  transfers  from  the  line  of  one  company  to  those 
of  another,  and  it  has  also  required  different  companies  to  use 
certain  tracks  in  common  where  the  public  interests  would  be 
served  by  such  an  arrangement. 

In  framing  franchise  legislation  for  Porto  Rico  Congress  made 
provision  for  this  same  form  of  indefinite  term  grant,  -j- 

In  view  of  the  fact  that  the  indefinite  term  franchise  has 
worked  so  well  in  practice,  it  may  be  in  order  to  question  the 
statement  of  the  Massachusetts  committee  that  found  in  favor 
of  this  form  of  grant  that  "such  a  franchise  is  to  the  last  degree 
illogical."  Things  that  are  illogical  usually  do  not  work  well,  in 
the  long  run  at  least.  The  fact  that  the  indefinite  term  franchise 

*Section  2  of  an  act  to  authorize  the  Metropolitan  Railroad  Company  to 
change  its  motive  power  for  the  propulsion  of  the  cars  of  said  company. 
Approved  August  2,  1894. 

f  See  text  of  the  Porto  Rican  franchise  legislation  in  the  appendix  to 
this  report. 


TEXT    OF    THE    REPORT.  2"J 

has  actually  produced  such  satisfactory  results  in  practice  must 
lead  one  to  inquire  if  it  is  not  really  correct  in  principle,  despite  its 
seeming  illogical  character. 

As  the  Massachusetts  committee  very  clearly  and  very  cor- 
rectly points  out,  the  street  car,  in  evolutionary  development,  is 
"nothing  more  nor  less  than  an  improved  omnibus,  and  the  tram- 
way a  special  feature  in  the  pavement  of  the  public  way;  a 
feature  adapted,  it  is  true,  to  the  car's  special  use,  but  not  neces- 
sarily excluding  from  general  use  the  portion  of  the  street  in 
which  it  is  laid.  This  is  all  the  street  railway  was  fifty  years  ago, 
when  first  laid ;  it  is  all  it  is  now — an  improved  line  of  omnibuses, 
running  over  a  special  pavement.  If  this  fact  be  firmly  grasped 
and  borne  constantly  in  mind,  the  discussion,  and  the  principles 
underlying  it,  are  greatly  simplified.  The  analogy  throughout  is 
with  the  omnibus  line,  and  not  with  the  railroad  train;  with  the 
public  thoroughfare,  and  not  with  the  private  right-of-way. 
Upon  this  distinction,  indeed,  all  the  questions  now  to  be  dis- 
cussed, whether  of  taxation  or  of  franchise  privilege  and  obliga- 
tion, will  be  found  to  turn." 

Now,  the  omnibus  is  operated  under  a  license  that  gives  no 
right  as  against  the  authority  granting  the  license  that  cannot  be 
altered  or  taken  away  at  any  time.  All  would  concede  the  un- 
wisdom and  impolicy  of  making  the  license  for  the  omnibus  a 
binding  contract  for  a  definite  period  of  time  that  could  not  be 
altered  or  revoked  by  the  granting  authority,  no  matter  how  con- 
ditions might  change,  and  no  matter  how  arbitrary  and  overbear- 
ing the  manager  of  the  omnibus  line  might  be  in  his  dealings  with 
the  public.  And  yet  the  indefinite  term  grant  or  revocable  license 
for  the  street  car,  which  is  only  an  improved  omnibus,  is  con- 
ceived to  be  illogical.  We  cannot  think  that  it  is  so.  On  the  con- 
trary, the  indefinite  term  grant  is  nearer  in  accord  with  the  correct 
principle  than  is  the  term  grant. 

Because  of  the  great  outlay  involved  in  establishing  a  street 
railway  system,  it  is  said,  the  owners  of  such  property  ought  to 
have  some  assurance  that  their  property  value  will  not  be  de- 
stroyed by  some  hasty  act  of  revocation.  And  so  they  ought. 
But  the  assurance  should  be  that,  if  their  rights  to  use  the  streets 
be  revoked,  their  property  suitable  to  and  used  for  street  railway 
purposes  should  be  taken  off  their  hands  at  a  fair  valuation ;  not 
that  they  should  be  privileged  to  remain  in  undisputed  possession 


28  STREET    RAILWAY    COMMIISSION 

of  the  public  streets  for  a  definite  period  of  time,  whether  they 
serve  the  public  well  or  ill. 

The  Street  Railway  Commission  believes  that  the  definite 
term  grant,  whatever  its  duration,  is  open  to  serious  objections. 
It  is  of  opinion  that  a  grant  of  indefinite  duration  but  subject  to 
termination  at  any  time  upon  certain  conditions,  one  of  which 
should  be  the  taking  of  the  property  of  the  grantee  at  a  fair  val- 
uation, would  be  productive  of  much  better  results.  But  this 
idea  is  so  much  at  variance  with  commonly  accepted  views  in  this 
State  concerning  franchise  grants,  and  would  mark  such  a  radical 
departure  from  present  policy,  that  the  Commission  has  hesitated 
to  do  more  than  to  commend  the  idea  to  public  favor.  It  has  not 
sought  to  incorporate  the  idea  into  the  draft  of  the  bill  herewith 
submitted.  As  a  modification  of  this  idea,  however,  and  as  a 
means  of  controlling  the  situation  in  the  interest  of  the  public,, 
the  Commission  would  recommend  that  grants  hereafter  made 
contain  a  provision  giving  the  city  the  right  to  terminate  the  grant 
and  to  take  over  the  property  at  an  appraised  valuation  at  the  end 
of  every  five  year  period.  This  provision  should  be  inserted  pri- 
marily with  a  view  to  its  use  only  in  case  public  dissatisfaction 
with  service  and  conditions  should  be  so  great  as  to  make  a 
change  in  management  imperative.  With  such  a  provision  in 
the  grant  there  is  much  less  likelihood  that  there  would  be  cause- 
for  public  dissatisfaction. 

The  Commission  has  not  thought  it  wise  to  make  any  change 
in  the  term  named  by  the  present  law,  twenty  years,  for  which 
street  railway  grants  may  run.  But  it  has  sought  to  define  some- 
what more  clearly  the  status  and  rights  of  the  parties  to  the  trans- 
action (the  company  receiving  the  franchise  on  the  one  side  and 
the  local  authorities  granting  the  same  on  the  other  side)  at  the 
expiration  of  any  grant  hereafter  made.  The  provisions  of  the 
bill  in  this  respect  have  reference  only  to  future  grants  and  do 
not  apply  to  outstanding  grants  which  were  given  and  received 
under  the  existing  law.  The  bill  stipulates  (Section  12)  that  the 
authorities  making  the  grant  shall  have  the  right  at  the  expiration 
of  the  grant  to  take  over  the  property  of  the  grantee  at  a  fair 
valuation.  More  than  that,  the  company  holding  the  grant  is 
given  some  rights  as  against  the  local  authorities,  as  will  be  seen 
by  further  perusal  of  Section  12  of  the  bill.  This  feature  is  an 


TEXT    OF    THE    REEORT.  29 

important  modification  of  the  twenty  year  term  limitation  in  the 
direction  of  the  indefinite  term  grant,  heretofore  discussed. 

The  language  of  that  portion  of  Section  12  which  prescribes 
the  method  for  determining  the  valuation  of  street  railway  prop- 
erty to  be  taken  over  by  the  public  authorities  is  taken  bodily 
from  the  British  Tramways  Act.  That  language  has  been  ad- 
judicated by  the  highest  courts  of  Great  Britain  and.  has  been 
interpreted  (British  Law  Reports,  1894,  A.  C.  456)  to  mean 
substantially  that  cost  of  duplication  less  depreciation  is  to  be 
taken  as  the  basis  for  determining  valuation.  In  taking  over  the 
language  of  the  British  statute  the  British  judicial  interpretation 
of  the  language  would  naturally  be  accepted  too,  and  presumably 
our  courts  would  follow  the  British  decisions,  should  the  lan- 
guage in  question  become  the  subject  of  litigation. 

m. 

MUNICIPAL  OWNERSHIP. 

The  bill  as  drafted  and  presented  by  the  Commission  gives  to 
•cities  the  power  to  own  and  operate  street  railways.  It  does  not 
follow  from  this,  however,  that  the  Commission  favors  the  early 
adoption  by  Chicago  of  the  policy  of  municipal  ownership  and 
operation.  In  fact,  the  Commission  is  quite  distinctly  of  the~j  ^ 
opinion  that  it  would  be  unwise  for  the  city  of  Chicago  to  attempt /• 
.at  the  present  time  to  operate  its  street  railways.  Nor  has  the 
Commission  any  notion  that  the  people  of  Chicago,  if  given  the 
opportunity  through  the  referendum  to  express  themselves  upon 
the  subject,  would  at  present  favor  municipal  operation.  What 
the  decision  of  the  people  might  be  upon  this  proposition  at  some 
future  time  and  under  different  circumstances  can  only  be  a  matter 
of  conjecture.  But  if  in  the  future  the  people,  for  reasons  that 
should  seem  sufficient  to  them,  should  desire  to  operate  the  street 
railway  system,  they  should  have  the  power  to  do  so.  To  guard 
against  the  experiment  ever  being  entered  upon  without  due  de- 
liberation the  bill  presented  provides  that  no  city  shall  undertake 
to  operate  street  railways  unless  the  proposition  to  operate  shall 
first  be  submitted  to  popular  vote  and  approved  by  four-sevenths 
of  those  voting  thereon. 

In  the  discussion  of  this  general  topic  the  distinction  between 
municipal  ownership  without  operation,  and  municipal  ownership 


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32  STREET    RAILWAY    COMMISSION 

other.     The  question,   according  to   Prof.   Laughlin,   is   chiefly 
dependent  for  its  decision  "upon  expediency  and  local  conditions." 

The  Legislatures  of  progressive  States  are  rapidly  coming  to 
recognize  and  concede  the  right  of  cities  to  determine  these  ques- 
tions for  themselves.  Most  city  charters  of  recent  adoption  confer 
the  power,  either  immediately  or  ultimately,  to  own  and  operate 
railways.  The  Greater  New  York  charter  authorizes  the  city  to 
acquire  and  operate  street  railways  at  the  expiration  of  any  grants 
hereafter  made.  The  new  charter  of  Baltimore  follows  the  Greater 
New  York  charter  in  this  respect.  While  the  new  charter  of  the 
city  and  county  of  San  Francisco  goes  even  further  and  declares 
it  "to  be  the  purpose  and  intention  of  the  people  of  the  city  and 
county  that  its  public  utilities  shall  be  gradually  acquired  and  ulti- 
mately owned  by  the  city  and  county."  To  this  end  the  requisite 
powers  are  given  by  the  charter. 

Congress,  in  its  franchise  legislation  for  Porto  Rico,  has  rec- 
ognized that  the  policy  of  public  ownership  may  under  some 
conditions  be  desirable  by  stipulating  that  grants  to  public  service 
corporations  shall  provide  "for  the  purchase  or  taking  by  the 
public  authorities  of  their  property  at  a  fair  and  reasonable  val- 
uation."* 

Recent  examples  of  public  ownership  are  furnished  by  Boston 
and  New  York,  both  of  which  cities  own  but  do  not  operate  the 
subways  or  underground  roads  recently  completed  or  now  under 
construction. 

If  it  be  conceded  that  Chicago  may  desire  to  municipalize  the 
street  railway  system  at  any  time  within,  say,  the  next  twenty 
years,  or  if  it  be  desired  to  incorporate  into  the  ordinance  renew- 
ing grants  that  are  to  expire  in  1903  provisions  for  city  purchase 
at  the  expiration  of  the  next  grant,  legislation  permitting  the  city 
to  acquire  street  railways  should  be  secured  before  the  renewal 
ordinances  are  granted.  Otherwise  a  purchase  clause  inserted  in 
such  renewal  ordinances  may  prove  of  no  value  to  the  city  when 
the  time  comes  to  exercise  the  supposed  right  of  purchase. 

The  first  ordinance  under  which  a  street  railway  line  was 
constructed  in  Chicago,  granted  by  the  City  Council  in  1858,  con- 
tained provisions  looking  to  purchase  by  the  city  at  the  expiration 

*See  the  text  of  the  Porto  Rican  franchise  legislation  in  the  appendix 
to  this  report. 


TEXT    OF    THE   REPORT.  33 

•of  a  period  of  twenty-five  years,  or  in  1883.  When  the  time  came 
for  the  exercise  of  this  right  of  purchase,  the  situation  was  com- 
plicated in  several  ways.  For  one  thing,  it  was  claimed  that  the 
Legislature,  by  the  act  of  1865,  had  postponed  to  ninety-nine 
years  from  1858  the  right  of  purchase  given  by  the  ordinance  of 
1858.  Moreover,  the  Legislature  has  never  authorized  cities  to 
acquire  street  railways,  so  that  the  right  of  purchase,  if  valid  as 
against  the  company,  could  not  be  exercised  by  the  city  for  lack 
of  power.  But  these  considerations  aside,  Mr.  Francis  Adams, 
the  then  Corporation  Counsel,  in  an  opinion  delivered  to  the  City 
Council  July  23,  1883,  and  concurred  in  by  Mr.  Julius  Grinnell, 
the  then  City  Attorney,  held  that  the  purchase  provisions  of  the 
ordinance  of  1858  were  absolutely  void  and  of  no  value  to  the 
city.  Following  is  an  excerpt  from  that  opinion  bearing  on  the 
point  in  question  :* 

"First,  were  Sections  10  and  n  of  the  ordinance  of  August 
16,  1858,  valid  when  passed,  in  so  far  as  they  relate  to  the  purchase 
of  the  railways;  and  if  not,  have  they  been  validated  by  subse- 
quent legislation? 

"The  answer  to  this  question  depends  upon  whether  the  city 
of  Chicago,  at  the  date  of  the  passage  of  the  ordinance,  had  power 
by  its  charter,  or  any  law  of  the  State,  to  contract  for  the  purchase 
of  a  railway,  with  its  appurtenances.  A  municipal  corporation 
is  the  creature  of  law ;  it  exists  and  acts  only  by  virtue  of  law. 
The  power  which  the  law  confers  upon  it,  either  in  express  words 
or  by  necessary  implication,  it  may  exercise.  When  it  attempts 
to  exercise  powers  not  so  conferred,  such  attempts  are  abso- 
lutely null  and  void.  The  rule  of  construction  of  public  and 
private  charters  is  the  same,  and  is,  that  the  corporation  can  exer- 
cise no  power  not  granted  in  express  words  or  by  necessary 
implication. 


"Neither  the  charter  of  the  city,  nor  any  law  of  the  State,  in 
force  August  16,  1858,  conferred  upon  the  city  either  in  express 
words  or  by  necessary  implication,  the  power  to  purchase  or  con- 
tract for  the  privilege  of  purchasing  a  street  railway.  I  have, 
therefore,  no  doubt  that  Sections  10  and  n  of  the  ordinance,  in 

*See  Chicago  City  Council  Proceedings  for  1883-4,  page  80. 


.  N 


m-    i~ 


ier..-."r-i  :•:  ' 


Ulltl    ~~     "-'  1 H^ ~~~l '  1~ 


*i    TT^~    ~~r~^^*<i~ " 

—r-    1-03, 


cr  i 


:f 


•LiSmil  in  this 
wonld  be  vcne  the  cxedk  of  the  cny  pledged  to  the  payment  ott  the 

L'.r._i   _r  :-r~._z.i3.:t:r  I-:"  ::ni. 
It 

~-_  n~- .  _. 


I 


:  to  be  cxnstincied,  why  cannot  the  aly  do  the  sanK  r 
llie  Chicago  Union  Elevated  Loop  wnl  serve  as  a  good  •ne- 

vtsion  tor  Ac  issuance  of  bonds  to  Ac  tace  value  at  S^oooj 
and  off  stock  to  Ac 
ofiewd  to  Ac  pidilii   in  Ac 
they  were  turned  over  to  Ac 
the  same  interests  as  Ae 

IT  on  to  Ae  maiiH.  Ae  prevannMr  mice  of 


the  bonds  being  ahont  io8L  and  of  Ae  stack  abont  90.    Thns  she 

market  valne  off  Ac  loop  seenrvjes  ontstanding  is  ahont  SIOUOOOL.- 
Mo>  one  except  Ac  pranoters  knows  Ae  cost  of  Ac 


36  STREET    RAILWAY    COMMISSION 

for  injuries  to  abutting  property,  could  not  have  equaled  the  face 
value  of  the  bonds  issued,  or  $5,000,000.  As  the  cash  value  of 
the  loop  securities  outstanding  is  twice  that  amount,  the  elevated 
loop  franchises  represent  a  gratuity  to  the  promoters  of  not  less 
than  $5,000,000. 

Now,  the  Elevated  Loop  is  an  undertaking  admirably  adapted 
to  municipal  ownership.  An  income  of  more  than  the  amount 
needed  to  meet  interest  charges  on  bonds  is  absolutely  assured  by 
the  leases  with  the  operating  companies  that  use  the  loop.  The 
expenses  of  maintenance  are  light,  and  the  owner  is  not  called  upon 
to  operate. 

Had  the  city  possessed  the  power  to  do  so,  we  have  little 
doubt  that  under  the  plan  of  raising  money  for  street  railway 
purposes  provided  for  in  the  bill,  the  city  could  have  borrowed 
all  the  money  needed  for  the  construction  of  the  Elevated  Loop, 
and  would  now  have  in  its  possession  a  very  valuable  revenue- 
producing  property. 


IV. 

REFERENDUM. 

The  provisions  relating  to  the  referendum  in  the  proposed 
bill  are  self-explanatory  and  therefore  do  not  call  for  much 
comment.  It  is  the  opinion  of  the  Commission  that  the  deci- 
sion of  important  questions  of  street  railway  policy  may  very 
properly  and  very  profitably  be  left  with  the  people  themselves,  so 
far  as  such  a  course  may  be  practicable.  It  is  therefore  provided  in 
the  bill  that  the  local  authorities  may  submit  to  popular  vote  any 
proposition  or  ordinance  relating  to  street  railways. 

It  is  sometimes  contended  that  the  law  should  require  every 
ordinance  of  the  city  council  conferring  franchise  rights  to  be 
submitted  to  popular  vote.  Such  a  provision  of  law,  the  Commis- 
sion believes,  would  make  it  the  duty  of  the  people  to  pass  direct 
judgment  upon  a  considerable  number  of  ordinances  of  compara- 
tively minor  importance  with  which  they  would  rather  not  be 
bothered.  It  is  only  the  most  important  measures  upon  which  the 
people  are  likely  to  desire  a  chance  for  the  direct  expression  of 
their  wishes,  and  that  opportunity  for  direct  expression  of  the 


TEXT    OF    THE    REPORT.  37 

popular  will  the  Commission  has  aimed  to  give  by  the  provisions 
of  Section  8,  which  requires  submission  to  popular  vote  of  certain 
ordinances  in  case  a  specified  proportion  of  the  voters  shall  ask  for 
such  submission. 


V. 


PUBLICITY. 

The  provisions  of  the  proposed  bill  relating  to  accounting 
and  publicity  are  based  upon  the  conception  that  the  street 
railway  business  is  a  public  business,  and  that  therefore  the 
affairs  of  companies  entrusted  with  the  management  of  such 
a  business  should  be  open  and  known  to  the  public  to  the  same 
extent  as  if  the  business  were  managed  by  the  public  directly. 
In  line  with  this  conception,  the  Commission,  in  the  bill  presented, 
has  made  substantially  the  same  plans  for  accounting  and  pub- 
licity applicable  to  street  railway  companies  and  to  municipalities 
that  may  either  own  or  operate  street  railways  (Sections  22,  23, 
24,  27  and  28  of  the  proposed  bill). 

The  city  is  sometimes  said  to  be  a  partner  in  the  street  railway 
business.  It  furnishes  what  is  oftentimes  the  most  valuable  part 
of  the  assets,  namely,  the  franchise.  Yet  when  it  comes  to  re- 
newing the  partnership  agreement  the  city,  under  present  ar- 
rangements, is  not  able  to  act  intelligently  because  the  main 
facts  necessary  to  intelligent  action  are  kept  from  it. 

The  bill  requires  annual  reports  covering  the  important  fea- 
tures of  street  railway  operation  and  management.  But  a  system 
of  publicity  through  reports,  to  be  satisfactory,  must  be  based 
upon  a  proper  system  of  accounting.  Therefore  the  Commission, 
in  the  bill  presented,  has  also  provided  that  accounts  shall  be  kept 
in  a  uniform  manner  upon  a  system  to  be  prescribed  by  public 
authorities.  In  the  main,  this  provision  is  modeled  after  the 
Massachusetts  law  upon  the  same  subject.  The  provision  for 
uniformity  will  give  the  published  reports  a  value  for  purposes  of 
comparison  that  they  otherwise  would  not  possess. 

After  consideration  of  the  subject,  the  Commission  arrived 
at  the  conclusion  that  it  would  be  best,  on  the  whole,  to  make 
the  State  auditor  the  officer  for  receiving  reports  and  for  pre- 


38  STREET    RAILWAY    COMMISSION 

scribing  and  supervising-  methods  of  accounting.  In  this  way 
uniformity  over  the  entire  state  can  be  secured.  Publicity  is 
desirable  not  alone  for  railways  operating  entirely  within  the 
limits  of  a  municipality.  Street  railways  connecting  cities  and 
towns  are  growing  rapidly  in  number  and  such  railways  are  becom- 
ing a  factor  of  ever  increasing  importance  in  the  rural  life  of  the 
state.  Therefore  the  state  ought  to  be  possessed  of  information 
concerning  these  railways  that  will  enable  it  to  deal  intelligently 
with  problems  concerning  them  whenever  the  necessity  may  arise 
for  legislation.  The  needs  of  local  authorities  for  information 
concerning  local  railways  are  not  overlooked,  however,  for  the  bill 
requires  companies  operating  railways  within  any  municipality 
to  file  with  the  financial  officer  of  such  municipality  a  duplicate- 
copy  of  the  report  transmitted  to  the  State  Auditor.  Moreover, 
the  financial  officer  of  the  municipality,  for  the  purpose  of  verify- 
ing the  accuracy  of  such  report,  is  given  the  same  right  to  examine 
the  books  of  the  company  as  by  the  bill  are  given  the  State 
Auditor. 


VI. 

CONTROL    OF    CAPITALIZATION. 

Over-capitalization  is  a  favorite  device  for  concealing  large 
profits.  The  putting  on  the  market  of  large  quantities  of  watered 
securities  is  objectionable,  too,  as  introducing  complications 
which  it  is  better  to  avoid.  The  Commission  is  strongly  of  the 
opinion,  therefore,  that  provision  should  be  made  by  law  to 
prevent,  if  possible,  excessive  over-capitalization  by  street  rail- 
way companies. 

To  accomplish  this  object,  something  more  is  necessary  than 
a  mere  declaration  of  law  against  over-capitalization.  The  con- 
stitution of  Illinois  contains  a  provision  (Article  XI,  Section  91 
designed  to  prevent  stock  watering,  but  it  has  proven  of  com- 
paratively little  value.  In  order  to  prevent  over-capitalization 
there  must  not  only  be  a  law  against  it,  but  there  must  be  adminis- 
trative machinery  of  some  sort  to  pass  upon  all  bond  and  stock- 
issues  to  see  that  the  law  is  complied  with  before  the  securities 
are  put  out.  Massachusetts  has  such  special  administrative 


TEXT    OF    THE    REPORT.  39 

machinery  and  the  results  of  its  operations  appear  to  be  fairly 
satisfactory,  as  is  attested  by  the  following  excerpt  from  the 
report  (page  37),  made  to  the  Massachusetts  Legislature  in 
February,  1898,  by  the  special  committee  on  street  railways: 

"The  laws  of  Massachusetts  as  to  capitalization  have  been 
strictly  drawn  and  rigidly  administered,  nor  has  any  evidence 
been  adduced  showing  that  they  have  been  peculiarly  ineffective. 
On  the  contrary,  using  round  numbers  only,  the  capitalization 
per  mile  in  stock  and  bonds  ($46,000)  is  less  in  Massachusetts 
than  the  average  ($49,500)  in  the  New  England  states,  not  a  third 
of  what  it  is  in  New  York'  ($177,800)  or  half  what  it  is  in  Penn- 
sylvania ($128,200),  less  than  half  what  it  is  ($94,100)  in  the 
United  States  as  a  whole;  and  it  is  less  than  in  Great  Britain 
($47,000)." 

In  this  connection  some  figures  concerning  the  capitalization 
of  the  principal  Chicago  companies  may  be  interesting.  The  report 
of  the  Illinois  Bureau  of  Labor  Statistics  for  1896,  which  dis- 
cussed at  considerable  length  the  subject  of  street  railway  capital- 
ization, gave  the  following  (see  page  47  of  the  report)  as  the 
mileage  and  capitalization  of  the  three  great  companies  at  the  close 
of  1896: 

Outstanding         Total 
Mileage.     Obligations.       per  mile. 

Chicago  City  Ry.  Co 184.22       $16,619,500       $  90,216 

N.  Chicago  St.  R.  R.  Co 101  14,780,900         146,346 

West  Chicago  St.  R.  R.  Co. . .  .   202.62         30,291,900         149,500 


Totals 487.84      $61,692,300      $126,460 

Since  1896  mileage  and  capitalization  have  both  increased,  so 
that  new  calculations  will  be  necessary  to  determine  the  present 
capitalization  per  mile.  The  Chicago  City  Railway  Company 
has  a  mileage  of  205.48.  The  par  value  of  the  stock  outstanding 
is  $13,500,000.  The  bonds  outstanding  amount  to  $4,619,500, 
making  a  total  capitalization  of  $18,119,500,  which  would  be 
$88,172  per  mile. 

The  North  Chicago  Street  Railroad  Company  and  the  West 
Chicago  Street  Railroad  Company  about  a  year  ago  were  merged 
into  the  Chicago  Union  Traction  Company,  which  company,  with- 
out creating  any  new  mileage,  has  added  $32,000,000  of  stock  to  the 
amount  already  resting  upon  the  mileage  of  the  West  and  North 


4O  STREET    RAILWAY    COMMISSION 

Chicago  systems.  The  total  bond  and  stock  obligations  of  the 
north  and  west  side  systems  assumed  by  the  Union  Traction 
Company,  less  stock  in  the  treasury  of  the  Union  Traction 
Company,  are  given  by  the  Investor's  Manual  for  May  5,  1900, 
as  follows : 

Total  West  Chicago  Bonds  and  Stocks $29,201,200 

Total  North  Chicago  Bonds  and  Stocks 13,913,900 


Total $43,115,100 

Adding  the  $32,000,000  stock  of  the  Union  Traction  Company 
makes  the  total  capitalization  $75,115,100.  The  mileage  of  the 
West  Chicago  system  is  202.70;  that  of  the  North  Side  system, 
94.33.  The  total  mileage  for  the  two  systems  is,  therefore,  297.03. 
According  to  these  figures,  the  capitalization  resting  upon  the 
tracks  of  the  West  and  North  Chicago  systems  after  merger 
into  the  Union  Traction  Company  would  be  $252,912  per  mile. 

But  the  Union  Traction  Company,  through  an  operating 
agreement,  also  controls  the  lines  of  the  Consolidated  Traction 
Company,  which  has  a  mileage  of  205.71.  (The  mileage  figures 
here  given  are  all  on  the  single  track  basis.)  Perhaps  it  would 
be  better,  therefore,  as  a  means  of  getting  the  present  capitaliza- 
tion per  mile,  to  spread  the  total  capitalization  over  the  502.74 
miles  of  single  track,  by  taking  into  calculation  the  mileage  of  the 
Consolidated  Traction  Company,  as  well  as  that  of  the  North 
and  West  Side  systems,  more  directly  controlled  by  the  Union 
Traction  Company. 

The  Consolidated  Traction  Company  has  issued  stock  to  the 
amount  of  $15,000,000,  but  as  that  stock  is  held  in  trust  for  the 
Union  Traction  Company  it  will  be  left  out  of  these  calculations. 
There  is  one  issue  of  bonds  outstanding,  guaranteed  by  the  Union 
Traction  Company,  of  $6,750,000.  Other  bond  obligations  out- 
standing amount  to  $5,435,000,  making  a  total  of  $12,185,000. 
This  amount  applied  to  the  mileage  of  the  Consolidated  Traction 
Company  alone,  205.71,  would  make  a  capitalization  per  mile 
of  $59,237.  Adding  to  the  amount  heretofore  obtained,  $75,115,- 
100,  the  $12,185,000  outstanding  bond  obligations  of  the  Consoli- 
dated Traction  Company,  and  dividing  the  sum — $87,300,100 — 
by  the  total  mileage  controlled  by  the  Union  Traction  Company 
— 502.74 — there  is  secured  a  quotient  of  $173,644,  which  may 


TEXT    OF    THE    REPORT.  41 

be  said  to  be  the  capitalization  per  mile  of  the  lines  controlled 
by  the  Chicago  Union  Traction  Company. 

Whatever  the  basis  of  figuring,  therefore,  the  West  and  North 
Side  systems  show  a  considerable  recent  increase  of  capitaliza- 
tion per  mile. 

To  return  to  consideration  of  means  of  preventing  over- 
capitalization. Massachusetts  seems  to  have  accomplished  the 
object  in  view  with  a  fair  degree  of  satisfaction  by  requiring 
all  bond  and  stock  issues  to  be  approved  by  designated  public 
authorities.  The  Commission  has  aimed  in  a  general  way  to 
follow  the  Massachusetts  plan.  Section  25  of  the  proposed  bill 
prohibits  excessive  over-capitalization  and  the  State  Auditor, 
the  Attorney  General  and  the  State  Treasurer  are  constituted  a 
board  to  pass  on  stock  and  bond  issues  to  see  that  the  prohibitions 
of  the  law  are  recognized. 

The  manner  of  constituting  this  Board  was  a  matter  which 
the  Commission  did  not  find  easy  of  solution.  As  the  duties  of 
such  a  board  will  not  be  onerous  it  seemed  undesirable  to  create 
entirely  new  offices.  In  Massachusetts  the  duty  of  passing  upon 
stock  and  bond  issues  of  street  railway  companies  is  made  to 
rest  with  the  State  Railroad  Commission.  The  Street  Railway 
Commission  was  averse  to  recommending  the  adoption  by  Illinois 
of  this  feature  of  the  Massachusetts  law  because  of  the  fear  that 
such  a  recommendation  might  be  made  use  of  as  a  dangerous 
precedent  for  giving  the  Illinois  Railroad  Commission  an  amount 
of  control  over  street  railways  in  other  respects  that  would  be 
objectionable  to  popular  sentiment  in  the  cities  of  this  state.  On 
the  whole,  therefore,  it  was  deemed  the  most  advisable  course 
to  vest  ill  the  state  officers  indicated  the  duty  of  passing  on 
stock  and  bond  issues  with  a  view  to  preventing  over-capitali- 
zation. The  Auditor,  as  one  of  the  members  of  this  board,  will 
have  in  his  possession  the  information  concerning  street  railways 
of  the  state  that  may  be  requisite  to  the  passing  of  correct 
judgment  on  the  issues  presented. 

VII. 
FRONTAGE   LAW. 

The  existing  frontage  consent  law  (embodied  in  the  City 
and  Village  Act,  clause  90  of  section  62,  Hurd's  Revised  Stat- 


42  STREET    RAILWAY    COMMISSION 

utes)  seems  to  require  modification  in  some  respects.  Front- 
age consents  should  be  required  only  when  it  is  first  sought 
to  lay  down  tracks  upon  a  street.  Where  a  railway  is  in 
operation  upon  a  street  no  such  consents  should  be  necessary 
to  the  granting  of  an  ordinance  to  continue  the  use  of  such  a 
street  for  railway  purposes.  Probably  the  existing  law  would  not 
be  interpreted  to  require  consents  for  such  purpose,  but  it  is 
well  to  have  all  doubt  removed  by  making  the  language  of  the  law 
clearer  in  this  respect,  which  the  Commission  has  aimed  to  do 
in  the  draft  of  the  bill  presented.  (Section  7.) 

According  to  the  theory  of  the  frontage  consent  law  the  prop- 
erty owner  is  a  trustee  for  the  public.  It  is  expected  that  he  will 
give  his  consent  freely  if  the  road  is  needed,  and  that  he  will  with- 
hold his  consent  if  a  proposed  railway  is  not  in  the  public  interest. 
In  practice,  however,  this  theory  frequently  is  out  of  harmony 
with  the  actual  facts.  Sometimes  the  abutting  property  owner, 
for  personal  considerations,  gives  his  consent  without  any  regard 
whatever  to  public  interests.  In  some  instances,  too,  stubborn 
property  owners,  by  withholding  consent,  may  block  the  construc- 
tion of  a  road  for  which  there  is  an  imperative  public  need. 
While  the  wishes  of  the  abutting  property  owner  are  deserving 
of  consideration,  his  right  to  object  to  the  construction  of  a 
street  railway  which  the  public  welfare  may  require  should  not 
be  absolute  and  unqualified.  Other  states  with  frontage  laws  have 
found  some  such  modification  to  be  necessary.  In  New  York*,  for 
example,  when  the  abutting  property  owners  refuse  their  con- 
sent to  the  construction  of  a  street  railway,  it  is  possible  to 
override  their  objection  by  appeal  to  the  courts.  The  court,  on 
petition,  appoints  three  commissioners  to  investigate  and  report 
whether  the  public  welfare  would  be  served  by  the  construction  of 
the  proposed  road.  If  the  commission  finds  in  the  affirmative,  the 
road  may  be  built,  notwithstanding  the  objections  of  the  abutting 
property  owners. 

The  custom  of  entrusting  administrative  duties  to  the  courts  is 
open  to  objection.  Therefore,  the  Street  Railway  Commission, 
instead  of  following  the  New  York  plan  for  accomplishing  the 


*  Section  4  of  an  Act  of  New  York  passed  May  6,  1884,  entitled  "An 
Act  to  provide  for  the  construction,  extension,  maintenance  and  operation 
of  street  surface  railroads  and  branches  thereof  in  cities,  towns  and  vil- 
lages." 


TEXT    OF    THE    REPORT. 


object  in  view,  has  simply  provided  that  frontage  petitions  shall 
not  be  required  for  the  passage  of  any  ordinance  that  may 
be  approved  by  popular  vote.  It  would  seem  that  if  the  peo- 
ple of  the  entire  city  favor  a  railway  upon  a  given  street,  their 
wishes  should  govern.  On  the  other  hand,  it  is  believed  that 
the  people  at  large  can  be  depended  upon  not  to  do  wanton 
injury  to  any  street  or  neighborhood  by  inflicting  upon  it  a 
needless  railway. 

There  are  instances  in  which  petitions  several  years  old  have 
t>een  made  the  basis  for  ordinances  against  the  protest  of  the 
property  owners,  who  had  signed  originally  when  conditions 
may  have  been  quite  different.  To  guard  against  repetition  of 
abuses  of  this  kind  the  proposed  bill  provides  that  no  petition 
of  property  owners  shall  be  valid,  any  of  the  signatures  in  which 
were  obtained  more  than  two  years  before  the  passage  of  the 
•ordinance. 


VIII. 

LABOR    POLICY. 

The  Street  Railway  Commission  is  strongly  of  the  opinion 
that,  when  the  time  comes  for  the  passage  of  franchise  renewal 
ordinances,  the  City  Council  should  insert  provisions  designed 
to  prevent  interruptions  of  service  through  strikes  or  lock- 
outs. As  the  bill  submitted  is  in  the  nature  of  enabling  leg- 
islation, it  was  not  deemed  necessary  to  incorporate  therein 
any  specific  provisions  relating  to  labor.  The  authority  given 
the  City  Council  to  impose  terms  and  conditions  is  sufficient  to 
warrant  the  incorporation  into  a  franchise  grant  of  such  terms  as 
to  labor  as  the  Council  may  favor. 

European  and  Canadian  cities  very  commonly  insert  in  fran- 
•chise  grants  stipulations  concerning  the  maximum  length  of  the 
working  day  and  the  minimum  wage  for  employes.  In  some 
instances  other  provisions  in  the  interest  of  employes  are  inserted. 
The  most  elaborate  provisions  of  this  kind  with  which  we  are 
familiar  are  those  made  by  the  City  of  Paris  for  the  benefit  of 
employes  on  the  new  Paris  system  of  subways,  or  underground 
roads.  A  summary  of  these  provisions  will  be  found  in  the 


44  STREET    RAILWAY    COMMISSION 

address  of  Prof.  James  on  the  Paris  Subways,  in  the  appendix 
to  this  report. 

As  a  rule,  franchise  grants  by  American  cities  are  silent  on  the 
matter  of  labor  conditions.  One  of  the  recent  Detroit  franchises 
is  an  exception  to  the  general  rule  in  that  it  stipulates  that  employes 
shall  not  be  obliged  to  work  more  than  ten  hours  a  day.  In 
some  instances,  however,  states  by  legislation  have  attempted  to 
regulate  the  hours  of  employment  for  labor  of  this  kind.  Legis- 
lative enactments  requiring  the  vestibuling  of  cars  in  winter  ana 
other  measures  of  similar  kind  indicate  a  growing  disposition 
on  the  part  of  the  public  to  consider  the  welfare  of  this  special 
class  of  labor. 

Considerations  of  humane  regard  for  the  welfare  of  those  who 
toil  have  their  weight  in  support  of  measures  of  this  kind,  but 
these  measures  are  justified  primarily  on  quite  different  grounds. 
Fair  treatment  of  street  railway  workers  is  demanded  by  the  public 
primarily  as  a  means  of  insuring  efficient  and  continuous  service, 
free  from  the  interruptions  that  are  likely  to  grow  out  of  contro- 
versies over  labor  conditions  between  the  employing  corporation 
and  dissatisfied  employes.  Recent  street  railway  strikes  in  other 
cities  have  emphasized  the  importance  of  doing  whatever  may 
properly  be  done  to  guard  against  the  possibility  of  similar  inter- 
ruptions of  service  here. 

The  Street  Railway  Commission  is  of  the  opinion  that  the 
best  way*  to  accomplish  the  object  in  view  would  be  to  insert  in 
all  future  franchise  grants  a  provision  requiring  the  company, 
in  case  of  a  disagreement  with  its  employes  that  threatens  to 
interfere  with  service,  to  submit  the  same  to  arbitration  and  to 
abide  by  the  decision  of  the  arbitrator.  This  would  be  a  system 
of  arbitration  compulsory  upon  the  company  and  not  upon  the 
men,  it  is  true.  But  in  the  opinion  of  the  Commission  this  fact 
does  not  constitute  a  valid  objection  in  this  case,  as  it  would  if 
the  attempt  were  to  be  made  to  apply  the  same  system  to  indus- 
trial disputes  generally.  The  city  has  no  direct  dealings  with 
the  employes  which  give  it  warrant  to  require  special  things  of 
them.  But  the  company  comes  to  the  city  as  a  seeker  for  privi- 
leges, and  as  the  city  may  grant  or  withhold  the  privilege  at  will, 
so  it  may  properly  grant  the  privilege  subject  to  conditions,  and 

*Ald.  Mavor  and  Aid.  Jackson  do  not  concur  in  this  recommendation. 


TEXT    OF    THE    REPORT.  45 

one  of  those  conditions  may  properly  be  an  agreement  upon  the 
part  of  the  recipient  company  to  submit  disputes  with  its  employes 
to  arbitration.  It  is  as  competent  for  the  city  to  exact  such  an 
agreement  from  the  company,  as  a  condition  of  the  grant,  as  it  is 
for  the  city  to  exact  compensation,  or  to  require  the  company  to 
carry  policemen  and  firemen  free,  or  to  do  a  number  of  other 
things  which  the  city  does  require  of  street  railway  companies 
but  not  of  ordinary  industrial  corporations. 

Now,  as  to  the  practical  operation  of  this  plan.  If  the  com- 
panies always  stand  ready  to  arbitrate,  there  is  very  little  likelihood 
of  interruption  of  service  as  the  result  of  street  car  strikes.  Street 
car  strikers  cannot  win  a  contest  in  which  they  are  not  supported 
by  public  sentiment  and  public  sentiment  would  be  almost  unani- 
mous against  a  group  of  street  railway  employes  who  would  go 
on  strike  without  first  seeking  a  settlement  by  arbitration,  when 
such  a  remedy  should  be  open  to  them.  There  is  every  likelihood 
that  the  street  railway  employes  would  be  glad  to  make  use  of 
arbitration  as  a  means  of  adjusting  grievances.  There  is  every 
likelihood,  therefore,  that  a  system  of  arbitration  compulsory 
upon  the  company  receiving  the  grant  would  remove  most  of 
the  danger  of  interruption  of  service  through  strikes  or  lockouts. 

Continuous  service  is  the  thing  above  all  others  which  the 
public  must  have  from  its  transportation  agencies.  If  the  city 
itself  were  managing  the  street  railway  system  employes  would 
be  treated  in  such  a  manner  as  to  insure  a  service  free  from  inter- 
ruption on  account  of  strikes.  In  so  far  as  fair  treatment  of 
employes  may  be  necessary  to  continuous  service,  private  corpora- 
tions operating  street  railways  under  a  franchise  from  the  city 
should  be  required  to  treat  employes  as  fairly  as  the  city  itself 
would  treat  them  were  it  their  direct  employer. 

The  Commission  is  prepared  at  this  time  to  outline  only  the 
general  features  of  the  plan  which  it  recommends.  Before  the 
time  shall  come  for  action  upon  important  franchise  renewal 
ordinances  the  Commission  hopes  to  have  the  details  of  the  plan 
worked  out. 

IX. 

MOTIVE   POWER. 
Motive  power  is  one  of  the  subjects  which  the  Commission 


46  STREET    RAILWAY    COMMISSION 

was  instructed  by  the  resolution  creating  it,  to  investigate. 
The  Commission  has  been  able  thus  far  to  consider  this  ques- 
tion superficially  only.  The  subject  calls  for  further  study  and 
investigation  by  engineering  experts.  The  Commission  would 
recommend  that  the  City  Council,  in  the  next  appropriation  ordi- 
nance, include  an  item  for  this  purpose. 

The  overhead  trolley  with  which  the  people  of  Chicago  are 
familiar  answers  very  well  for  the  less  thickly  settled  parts  of 
the  city,  but  it  is  for  several  reasons  an  objectionable  form  of 
motive  power  for  the  populous  areas.  In  view  of  the  fact  that 
some  other  and  more  desirable  forms  of  motive  power  seem  to 
be  practicable  the  Commission  is  of  the  opinion  that  the  overhead 
trolley  ought  not  to  be  permitted  in  the  central  business  district- 
Just  as  soon  as  the  managers  of  companies  entering  the  downtown, 
district  understand  that  the  opposition  of  the  city  to  the  overhead, 
trolley  in  that  district  is  unrelenting  they  will  be  willing  to  adopt 
a  more  desirable  method  of  propulsion.  The  experience  of  New 
York  is  enlightening  upon  this  point.  The  authorities  there 
simply  would  not  permit  the  stringing  of  overhead  trolley  wires, 
even  when  the  alternative  seemed  to  be  long  continued  use  of 
horsecars.  As  a  consequence  street  railway  development  in  New 
York  City  seemed  belated  for  a  time  and  the  service  was  poorer 
than  in  cities  that  admitted  the  overhead  trolley.  But  New  York 
City  is  now  reaping  its  reward.  The  principal  lines  of  the  city 
either  have  been  or  are  rapidly  being  equipped  with  the  under- 
ground trolley  and  extensive  practical  experiments  are  being 
made  with  compressed  air  as  a  motive  power  on  New  York  lines. 

The  underground  trolley  is  in  successful  operation  in  New 
York  and  Washington,  as  well  as  in  several  European  cities.  The 
London  County  Council  recently  had  an  investigation  made  by  an 
engineer,  Mr.  J.  Allen  Baker,  whose  recommendation  was  in  favor 
of  the  underground  trolley.  A  like  investigation  for  Birmingham, 
England,  led  to  a  similar  recommendation  as  to  motive  power  for 
that  city.  Following  is  an  extract  from  the  report  to  the  London' 
County  Council,  which  was  submitted  Oct.  15,  1898: 

"With  the  examples  of  Washington,  the  capital  city  of  the  United 
States,  and  New  York,  its  commercial  metropolis,  on  one  side  of  the 
Atlantic,  and  Paris,  Edinburg,  Birmingham  and  other  cities  on  this  side, 
in  which  the  overhead  has  been  prohibited  and  other  forms  of  mechanical' 
traction  have  been  successfully  installed,  it  becomes  a  grave  question! 


TEXT    OF    THE    REPORT.  47 

as  to  whether  the  trolley  wire  should  be  permitted  in  any  of  our  London 
streets.  No  one  would  think  of  advocating  it  for  the  busier  streets  or 
the  more  central  parts  of  the  metropolis,  and  whilst  it  might  possibly  be 
put  up  without  serious  disadvantage  (except  its  unsightliness)  in  some 
of  the  suburban  streets,  any  economy  in  the  first  installation  would  be 
largely  counterbalanced  by  the  inconvenience  of  having  to  change  from 
one  system  to  another  on  the  same  routes  and  necessitating  all  the  cars 
that  run  on  the  combined  system  being  fitted  with  overhead  trolley  poles. 

"I  believe  the  stand  taken  by  the  Birmingham  Corporation  is  a  safe 
one  for  us  to  take  also.  In  that  city  there  are  already  in  operation  tram- 
way lines  run  by  steam,  cable,  electric  accumulator  and  horse,  while  in 
the  immediate  vicinity  there  are  several  installations  of  the  overhead  trol- 
ley. During  the  past  year  arrangements  were  nearly  completed  with 
a  Canadian  company  for  the  installation  of  a  combined  system — the  con- 
duit for  the  central  and  busy  streets,  the  overhead  for  the  suburbs — but 
the  town  council,  not  feeling  satisfied  to  have  any  of  their  streets  dis- 
figured with  the  trolley  wires,  sent  a  special  deputation  of  its  members  to 
visit  continental  cities  which  were  working  both  trolley  and  conduit,  with 
the  result  that  they  decided  that  the  overhead  wires  be  not  allowed  in  any 
part  of  the  city.  After  giving  an  acount  of  their  impressions  in  each  city 
visited,  their  committee  sum  up  their  conclusions  thus : 

"  'From  a  public  point  of  view,  and  apart  from  the  question  of  first 
cost,  there  does  not  seem  to  be  much  doubt  as  to  which  system  is  the 
better  one.  The  overhead  wire  gives  reliable  and  efficient  service,  but 
the  underground  conduit  is  equally  capable  of  doing  the  same.  It  has  been 
in  successful  use  for  several  years,  often  under  more  adverse  circum- 
stances than  would  be  met  with  in  Birmingham.  The  only  point  against 
it  is  that  its  construction  is  said  to  involve  a  more  prolonged  disturbance 
in  the  streets,  but  your  subcommittee  do  not  think  this  argument  of  much 
weight,  and  especially  if  its  depth  is  only  such  as  has  been  found  sufficient 
in  other  places  no  great  disturbance  of  gas  or  water  pipes  need  be  antici- 
pated. When  the  work  is  done  there  is  no  room  for  doubt  as  to  the 
appearance  of  the  streets  as  presented  by  the  two  systems.  In  one  case, 
the  appearance,  whatever  it  was,  remains  unaltered ;  in  the  other  case,  we 
have  a  number  of  poles  and  overhead  wires,  which,  wherever  seen,  can  be 
considered  nothing  but  a  disfigurement. 


"  'The  conclusion  to  be  drawn  from  this  inquiry  has  been  a  matter 
of  anxious  consideration  to  your  subcommittee.  They  recognize  that  it  is 
not  merely  a  matter  of  the  cheapest  form  of  traction  to  be  used  on  some 
of  the  present  tramways,  but  a  much  larger  one,  affecting  in  many  ways 
the  best  interests  of  the  whole  town.  Due  weight  has  been  given  by 
them  to  the  considerations  that  should  enter  into  such  an  important  ques- 
tion, and  they  strongly  recommend  that  no  consent  be  given  for  the  erec- 
tion of  overhead '  wires  in  any  part  of  the  city.  They  believe  that  less 
objectionable  and  equally  efficient  methods  of  applying  electricity  to  the 
working  of  the  tramways  are  available  and  at  a  reasonable  cost.' 


